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Industrial and Base Metals Fundamental Analysis – November 17, 2015 – Forecast – Copper & Palladium

By:
Barry Norman
Published: Nov 16, 2015, 11:50 UTC

Analysis and Recommendations: Copper dipped 28 points to trade at 2.14 its lowest price in 2015 while Palladium added $5.55 as traders bought up the cheap

Industrial and Base Metals Fundamental Analysis – November 17, 2015 – Forecast – Copper & Palladium

Metal Monday Bns
Analysis and Recommendations:

Copper dipped 28 points to trade at 2.14 its lowest price in 2015 while Palladium added $5.55 as traders bought up the cheap commodity. Copper prices have slid to a six-year low as worries about economic and demand growth in top consumer China escalates and abundant supplies reinforce expectations of surpluses.

But it is down more than three per cent so far this week and heading for its largest loss since September.

‘We’re seeing short-selling largely on the back of negative news flow out of China, where the economy is still not showing signs of stabilizing,’ Societe Generale analyst Robin Bhar said.

‘We’ve not had enough production cutbacks to rebalance the market, so a further fall in the price should act as a necessary incentive in an oversupplied market to force more output cuts.’

Data last week showed China’s industrial output was at a seven-month low in October and investment expanded at its weakest pace since 2000. ‘Base metals appear to be pricing in a ‘hard landing’ of the Chinese economy again,’ Commerzbank said in a note.

‘Prices have fallen too sharply and no longer reflect the fundamental picture on the metals markets. We therefore see considerable recovery potential for prices.’

However, one thing that could trigger another attempt at the downside is a higher US currency, which makes US dollar-denominated commodities more expensive for non-US firms.

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

 

  NZD

 

Core Retail Sales (QoQ)

1.0%

1.4%

0.0%

   

  NZD

 

Retail Sales (QoQ) (Q3)

1.6%

1.3%

0.1%

 

 

  JPY

 

GDP (YoY) (Q3)  

-0.8%

-0.2%

-1.2%

 

 

  JPY

 

GDP (QoQ) (Q3)  

-0.2%

-0.1%

-0.3%

 

 

  EUR

 

Core CPI (YoY) (Oct)

1.1%

1.0%

1.0%

 

 

  EUR

 

CPI (MoM) (Oct)

0.1%

0.1%

0.2%

 

 

  EUR

 

CPI (YoY) (Oct)

0.1%

0.0%

0.0%

 

 

  EUR

 

ECB President Draghi Speaks  

 

 

 

   

 

copper

Upcoming Economic Events that you should be monitoring:

Tuesday, November 17, 2015

Cur.

 

Event

Actual

Forecast

Previous

  GBP

 

CPI (MoM) (Oct)

 

0.1%

-0.1%

 

  GBP

 

CPI (YoY) (Oct)

 

-0.1%

-0.1%

 

  GBP

 

PPI Input (MoM) (Oct)

 

0.2%

0.6%

 

  EUR

 

German ZEW Current Conditions

 

55.5

55.2

 

  EUR

 

German ZEW Economic Sentiment

 

6.0

1.9

 

  USD

 

Core CPI (YoY) (Oct)

 

1.9%

1.9%

 

  USD

 

Core CPI (MoM) (Oct)

 

0.2%

0.2%

 

  USD

 

CPI (MoM) (Oct)

 

0.2%

-0.2%

 

  USD

 

Industrial Production (MoM) (Oct)

 

0.1%

-0.2%

 

Government Bond Auctions

Date Time Country

Nov 18 11:30 Germany New Eur 5bn Dec 2017 Schatz

Nov 18 11:30 UK 2% 2025 Gilt auction

Nov 18 11:30 Portugal Eur 1-1.25bn; bond auction

Nov 18 16:30 Sweden Announces details of Bond on 25 Nov

Nov 18 N/A Holland Announces details of Bond on 24 Nov

Nov 19 10:30 Spain 0.25% Apr 2018 Bono, 1.15% Jul 2020 Bono, 5.4% Jan 2023

Nov 19 10:50 France Eur 7-8bn; 4.25% Oct 2018 OAT, 0.25% Nov 2020 OAT, 2.25%

Nov 19 11:50 France Eur 1-1.5bn; 0.25% Jul 2024, 1.85% Jul 2027, 3.15% Jul 2032

Nov 19 N/A US Holds 10-year TIPS auction

Nov 20 16:30 Italy Announces details of CTZ/BTPei on 25 Nov

Nov 23 12:00 Belgium Auctions OLOs

Nov 23 N/A US Holds 2-year note auction

Nov 24 17:30 Italy Announces details of BTPs/CCTeu on 27 Nov

Nov 24 N/A Holland Eur 1.0-2.0bn 0.25% Jul 2025 DSL

Nov 24 N/A US Holds 5-year note auction

Nov 25 11:03 Sweden Holds bond auction

Nov 25 11:10 Italy Auctions CTZ/BTPei

Nov 25 11:30 Germany Eur 3bn 1.0% Aug 2025 Bund

Nov 25 N/A US Holds 2-year FRN auction

Nov 25 N/A US Holds 7-year note auction

Nov 26 11:03 Sweden Holds bond auction

Nov 27 11:03 Sweden Holds bond auction

Nov 27 11:10 Italy Auctions BTPs/CCTeus

 

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