Industrial and Base Metals Fundamental Analysis – November 16, 2015 – Forecast – Copper & Palladium

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Published: Nov 13, 2015, 12:36 UTC

Analysis and Recommendations: Copper prices continued to fall touching new lows at 2.166 giving up 6 points as the week closes. Palladium also tumbled

Industrial and Base Metals Fundamental Analysis – November 16, 2015 – Forecast – Copper & Palladium

Analysis and Recommendations:

Copper prices continued to fall touching new lows at 2.166 giving up 6 points as the week closes. Palladium also tumbled falling to 555.50 down by $3.20. Copper futures are plumbing the depths. The base metal is hovering around its worst levels since 2009, and that may be a telling sign about the state of the global economy, specifically China.

As the world’s No. 2 economy, China is one of the biggest importers of metals, like copper . Financial blogger Wolf Richter says China represents 40% of global demand. Copper is a key component in manufacturing everything from electronics to cars and other industrial goods, but signs of a slowdown in China are starting to play out in some of the commodities most associated with its decades-long growth path.

Many of the commodity markets have been going lower continuing their bearish trends due to the fact of a possible interest rate hike in the next several weeks from the Federal Reserve which is putting pressure on prices so continue to play this to the downside as I’m looking to add more contracts to this position once the risk/reward becomes in your favor once again so be patient.

As a base metal, copper represents a fundamental supply/demand dynamic. Greater demand for copper pushes prices up and higher prices support the efforts of companies to mine for copper. When supplies have outstripped demand, the price has fallen.

Palladium price swings are sending some investors running. The 60-day historical volatility for the metal used in car pollution-control devices reached the highest since February 2012 this week. Markets are being whipsawed as investors assess the outlook for slowing economic growth in China, the world’s largest auto market. Further muddying the picture is the outlook for rising US interest rates, after cheap credit helped fuel the best two-month stretch of car sales in 15 years in America.

Palladium posted its worst weekly loss since 2011 on Friday after rising two straight months and climbing the most in more than two years in September.

FxEmpire provides in-depth analysis for each currency and commodity we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more recent analysis and information in our weekly reports.

Today’s economic releases:

Cur.	Event	Actual	Forecast	Previous
JPY	Industrial Production (MoM) (Sep)	1.1%	1.0%	1.0%
JPY	Tertiary Industry Activity Index (MoM)	-0.4%	0.2%	0.2%
EUR	German GDP (YoY) (Q3)	1.8%	1.8%	1.6%
EUR	German GDP (QoQ) (Q3)	0.3%	0.3%	0.4%
EUR	GDP (YoY) (Q3)	1.6%	1.7%	1.5%
EUR	GDP (QoQ) (Q3)	0.3%	0.4%	0.4%
EUR	Trade Balance (Sep)	20.5B	18.2B	11.2B
USD	Core PPI (MoM) (Oct)		0.1%	-0.3%
USD	Core Retail Sales (MoM) (Oct)		0.4%	-0.3%

Upcoming Economic Events that you should be monitoring:

Monday, November 16, 2015

Cur.	Event	Actual	Forecast	Previous
NZD	Retail Sales (QoQ) (Q3)			0.1%
JPY	GDP (QoQ) (Q3)		-0.1%	-0.3%
JPY	GDP (YoY) (Q3)		-0.2%	-1.2%
EUR	Core CPI (YoY) (Oct)			0.9%
EUR	CPI (YoY) (Oct)
EUR	CPI (MoM) (Oct)		0.1%	0.2%
USD	NY Empire State Manufacturing Index		-5.00	-11.36