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Industrial and Base Metals Fundamental Analysis – November 3, 2015 – Forecast – Copper & Palladium

By:
Barry Norman
Published: Nov 2, 2015, 14:55 UTC

Analysis and Recommendations: Copper is in a pickle after diverging Chinese data was released over the past two days with the official manufacturing PMI

Industrial and Base Metals Fundamental Analysis – November 3, 2015 – Forecast – Copper & Palladium

Metal Monday Bns
Analysis and Recommendations:

Copper is in a pickle after diverging Chinese data was released over the past two days with the official manufacturing PMI missing the expectation of 50 and reported at 49.8 meaning an ongoing contraction which lowers the demand on metals. The private PMI released this morning remained on contraction but printed higher than forecast balancing the reports. Copper is trading at 2.315 down 2 points. Palladium tumbled $13.38 to trade at 663.88.

Copper dipped to a one-month low on Monday after China’s factory activity faltered last month, raising concerns that successive easing measures in the world’s top metals user are failing to jump start the real economy.

China’s factory activity fell for an eighth straight month in October but at a slower pace as export orders flickered into life, a private survey showed on Monday, pointing to continued sluggishness in the world’s second-largest economy.

“Markets are certainly not factoring in any significant boost from new easing measures in the short term,’’ said analyst Daniel Hynes of ANZ in Sydney. “While we’re a bit negative on the macro side, I think we have gotten past the cyclical lows in copper.’’

Copper prices marched lower after Federal Reserve officials said an interest-rate increase was still a viable policy option for 2015, highlighting their December meeting as the venue for reviewing whether the U.S. economy can shoulder higher borrowing costs. The policy shift is expected to boost the dollar and make dollar-denominated copper more expensive for buyers who use other currencies to fund their metals purchases.

“If they do raise, that’s bearish copper because it would force the dollar higher versus virtually everybody else,” said Ira Epstein, a broker with Linn & Associates in Chicago.

Some investors cut copper holdings on Friday as losses in China’s stock market fanned concerns about the country’s economic health. The Shanghai Composite Index closed down 0.1% on Friday. China is the world’s top copper buyer, driving about 40% of global demand for the metal.

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.

copper

Today’s economic releases:

Cur.

 

Event

Actual

Forecast

Previous

 

  AUD

 

AIG Manufacturing Index (Oct)

50.2

 

52.1

 

 

  AUD

 

Building Approvals (MoM) (Sep)

2.2%

2.0%

-9.5%

   

  CNY

 

Caixin Manufacturing PMI (Oct)

48.3

47.5

47.2

 

 

  EUR

 

German Manufacturing PMI (Oct)

52.1

51.6

51.6

 

 

  EUR

 

Manufacturing PMI (Oct)

52.3

52.0

52.0

 

 

  GBP

 

Manufacturing PMI (Oct)

55.5

51.3

51.8

   

 

Upcoming Economic Events that you should be monitoring:

Tuesday, November 3, 2015

Cur.

 

Event

Actual

Forecast

Previous

 

 

 

 

Japan – Culture Day

  AUD

 

Interest Rate Decision (Nov)

 

2.00%

2.00%

 

 

  GBP

 

Construction PMI (Oct)

 

58.8

59.9

 

 

  NZD

 

GlobalDairyTrade Price Index

 

 

-3.1%

 

 

  USD

 

Factory Orders (MoM) (Sep)

 

-0.9%

-1.7%

 

 

Government Bond Auctions

Date Time Country

Nov 03 10:10 Austria Holds RAGB bond sale

Nov 04 15:30 Sweden Announces details of Bond on 11 Nov

Nov 04 N/A Holland Announces details of Bond on 10 Nov

Nov 05 09:30 Spain Auctions Bonos

Nov 05 09:50 France Auctions OATs

Nov 05 10:03 Sweden Holds I/L bond auction

 

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