Copper Rallies Following US Inflation Miss
Copper Jumps
Copper prices are pushing higher through the middle of the week with the futures market up around 3%. The move comes amidst a changing outlook for the US Dollar on the back of yesterday’s softer-than-forecast US inflation data. Headline CPI dropped to 3.5% last month, down sharply from the prior month’s 4.2% reading and well below the 3.8% the market was looking for. With Fed rate hike expectations cooling accordingly commodities prices are pushing higher today and copper is benefiting firmly. Pricing for a Fed rate hike this month has now dropped by more than 50% with traders widely expecting the Fed to hold rates steady. Year end rate hike pricing has also cooled and while this narrative remains, copper prices look poised to gain further particularly if we start to see USD dropping.
Chile Output Declines
Copper prices are also being supported here by news of continued production declines in Chile, the world’s largest copper producer. The ongoing impact of sulphuric acid restrictions out of China is taking its toll and other factor such as water shortages, site maintenance and labour disputes are also impacting output levels. While this dynamic remains, copper prices should continue to advance on falling supply levels and better demand as USD cools.
Technical Views
Copper
Copper prices are now turning higher again within the broader bull channel after breaking out of the corrective bear channel from YTD highs. Now above 6.2845 once again, focus is on a fresh push higher here with 6.5830 the next target for bulls.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.