Analysis and Recommendations (Copper And Palladium Forecast):
Copper fell 9 points to trade at 2.829 against the greenback rally and the fading stimulus hopes from China. Palladium gained almost $10 after auto sales increased last month. Consumption of refined copper in China in the second half of 2015 is likely to rise as Beijing’s moves to increase liquidity and cut costs to local firms in an effort to stimulate the economy.
China earlier this month cut interest rates for the third time in six months and is expected to cut rates again as part of Beijing’s measures to support the slow economy.
The recent measures include more IPOs in the equity market and requiring banks to keep funding state projects, increasing the liquidity to local firms.
Copper is a major indicator for industrial activities, used in power cables to home appliance. Growing demand in the world’s top consumer, China could support global prices. Yesterday’s weak housing data from China was the catalyst for the weakness in the complex. Chinese housing prices in April declined for the eighth consecutive month and prices of new homes declined in 69 of 70 cities, according to the National Bureau of Statistics.
Likewise, in the US, the NAHB housing market index was at 54 in May, below the 57 forecast and down from 56 in the previous month. The reading was a two-month low and suggests the first-quarter US economic slowdown has persisted into the second quarter.
The market is now awaiting Thursday’s Chinese HSBC flash manufacturing PMI data for more clues on economic conditions there – the country is forecast to continue its fall into contraction.
ForexTraq 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 actual vs. forecast:
|AUD||RBA Assist Gov Lowe Speaks|
|JPY||GDP (YoY) (Q1)||2.4%||1.5%||1.1%|
|JPY||GDP (QoQ) (Q1)||0.6%||0.4%||0.3%|
|AUD||Westpac Consumer Sentiment (May)||6.4%||-3.2%|
|EUR||German PPI (MoM) (Apr)||0.1%||0.2%||0.1%|
|GBP||BoE MPC vote cut (May)||0||0||0|
|GBP||BoE MPC vote hike (May)||0||0||0|
|GBP||BoE MPC vote unchanged (May)||9||9||9|
|GBP||BoE MPC Meeting Minutes|
Upcoming Economic Events that you should be monitoring:
Thursday, May 21, 2015
|CNY||HSBC Manufacturing PMI||49.3||48.9|
|EUR||German Manufacturing PMI||52.3||52.1|
|GBP||Retail Sales (MoM) (Apr)||0.4%||-0.5%|
|USD||Existing Home Sales (Apr)||5.24M||5.19M|
|USD||Philadelphia Fed Manufacturing||8.0||7.5|
Government Bond Auctions
Date Time Country
May 21 08:30 Spain Auctions Bonos
May 21 09:03 Sweden Holds bond exchange auction
May 21 09:10 France Auctions BTANs
May 21 09:30 UK Auctions 4.75% 2030 Conventional Gilt
May 21 10:10 France Auctions
May 21 15:30 Italy Announces details of CTZ/BTPei on 26 May
May 21 15:00 US Announces details of 2-year FRN on 27 May, plus 2/5/7 year
May 21 17:00 US Auctions 10-year TIPs
May 22 09:03 Sweden Holds bond exchange auction
May 22 10:00 Norway Details bond auction on 27 May
Industrial analysis forecast
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