Weekly forecasts

Copper Fundamental Forecast – April 8, 2016


Copper followed the commodities sector on the down slope as traders looked for safety today as oil prices reversed gains. Copper declined 40 points to 2.104. Earlier this week trade data showed some glimmers of optimism for copper producers as China’s February copper imports surged 50% year-over-year. Many people see the rise in imports as a sign of demand picking up. However, while imports rose, Shanghai Futures Exchange inventory levels hit new records. This seems to suggest that Chinese copper imports are rising but they aren’t backed by end-user demand.Copper prices defined logic in the first quarter of 2016, rallying even though there wasn’t any fundamental support behind the metal’s strength. In the first quarter the metal climbed over 3%, even though concerns remained about global economic conditions and copper’s supply/demand balance.The early year copper rally was supported by some slightly better Chinese economic data, which gave traders some reason to reinvest in the metal after 2015’s sell off; but there is no reason to believe China’s economy is out of the woods and that economic growth will follow. With China the world’s largest copper consumer, its economic health is important for copper prices. The early year copper rally was also without a significant change in the copper market’s supply situation.Initially, copper market participants cheered the news that copper inventories on the LME were declining, but a closer examination of the global inventory state showed that the declines on the LME were being pared by hefty supply builds in Shanghai. Inventories in Shanghai versus the LME climbed due to an arbitrage opportunity between the two markets. This movement reflects a shift in storage and not a fundamental change in supply/demand and therefore cannot be taken as a reason to believe the copper market’s supplies were shrinking.FxEmpire provides in-depth analysis for each asset 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 up to the data analysis and information in our weekly reports, which covers the current week and are published by Sunday before the new week begins. Daily we share any new events, forecasts or analysis that affect the current day. To achieve a full accurate understanding it is important that you study all of our data and analysis as a whole.Today’s economic releases:

  USDFOMC Member Bullard Speaks
  USDFOMC Member Kaplan Speaks
  JPYBoJ Governor Kuroda Speaks
  GBPHalifax House Price Index (YoY) (Mar)9.5%9.7%
  EURECB Monetary Policy Meeting
  USDInitial Jobless Claims270K276K
  CADBuilding Permits (MoM) (Feb)4.8%-9.8%
  EURECB President Draghi Speaks

 copperUpcoming Economic Events that you should be monitoring:Friday, April 8, 2016

  USDFed Chair Yellen Speaks
  JPYAdjusted Current Account1.57T1.49T
  JPYCurrent Account n.s.a. (Feb)2.006T0.521T
  USDFOMC Member George Speaks
  EURGerman Trade Balance (Feb)18.5B18.9B
  GBPIndustrial Production (MoM) (Feb)0.1%0.3%
  GBPManufacturing Production (MoM) (Feb)-0.2%0.7%
  GBPTrade Balance (Feb)-10.20B-10.29B
  GBPTrade Balance Non-EU (Feb)-2.60B-2.20B
  CADHousing Starts (Mar)190.0K212.6K
  CADEmployment Change (Mar)10.0K-2.3K
  CADUnemployment Rate (Mar)7.3%7.3%
  GBPNIESR GDP Estimate0.3%
  USDBaker Hughes U.S. Rig Count362

Government Bond AuctionsDate    Country

Apr 08 17:20 Italy Announces details of bond auction

Apr 08 12:00 Iceland Holds bond auction

Apr 12 11:30 Germany Holds I/L bond auction

Apr 12 19:00 US Holds 3-year note auction

Apr 13 11:03 Sweden Holds bond auction

Apr 13 11:10 Italy Holds bond auction

Apr 13 11:15 Switzerland Holds bond auction

Apr 13 11:30 UK Holds bond auctionApr 13 19:00 US Holds 10-year note auction

Apr 14 12:00 Iceland Holds bond auction

Courtesy: Fxempire

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