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Industrial and Base Metals Fundamental Analysis, May 8, 2015 – Forecast – Copper, Palladium & More

Metals Thursday BnsAnalysis and Recommendations:

Copper is flat but remains at the top of its trading range at 2.926 while its sister Palladium dipped $1.45 after Chinese auto sales fell this month. Palladium is trading at 791.20. Prices of base metals grew in the last two weeks. They could benefit not only from the weakened dollar but, paradoxically, also from China’s poor data, i.e., the business mood index in industry (HSBC PMI), which dropped to 48.9 points (one-year low). In the end the flash forecast for the index was surprisingly revised downwards. The main reason for another decline in the index is lower new orders from the domestic economy, indicating a need to continue to ease domestic monetary conditions and thus potentially higher demand for commodities. The question, however, is, whether further monetary stimulus can outweigh a likely slowdown in the pace of economic growth. Prices of the red metal have been well-supported in recent weeks amid mounting speculation policymakers in China will have to introduce further stimulus measures to jump start the economy amid lackluster growth.

Since November, the People’s Bank of China has introduced a series of stimulus measures, including lowering interest rates twice and cutting the reserve requirement ratios of major banks twice, in order to spur economic activity and boost growth.

Copper prices inched lower on Wednesday, one day after rallying to the highest level of the year on hopes for more monetary easing out of China. On the Comex division of the New York Mercantile Exchange, Copper for July delivery shed 0.7 cents, or 0.24%, to trade at $2.928 a pound during European morning hours. Futures held in a tight range between $2.922 and $2.947.

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:

Cur.

 

Event

Actual

Forecast

Previous

 

  AUD

 

Employment Change (Apr)

-2.9K

5.0K

48.2K

   

  AUD

 

Full Employment Change (Apr)

-21.9K

 

41.3K

   

  AUD

 

Unemployment Rate (Apr)

6.2%

6.2%

6.1%

 

 

  EUR

 

German Factory Orders (MoM)

0.9%

1.5%

-0.9%

 

 

  RUB

 

Central Bank reserves (USD)

 

 

353.5B

 

 

  USD

 

Initial Jobless Claims

 

280K

262K

 

 

 copper thurs

Upcoming Economic Events that you should be monitoring:

Friday, May 8, 2015

Cur.

 

Event

Actual

Forecast

Previous

 

  CNY

 

Trade Balance (Apr)

 

39.45B

3.08B

 

 

  USD

 

Nonfarm Payrolls (Apr)

 

224K

126K

 

 

  USD

 

Unemployment Rate (Apr)

 

5.4%

5.5%

 

 

  CAD

 

Employment Change (Apr)

 

-5.0K

28.7K

   

Government Bond Auctions

Date Time Country

May 07 08:30 Spain Auctions 0.5% Oct 2017 Bono, 0.55%

May 07 09:10 France Auctions OATs

May 07 09:10 Sweden Holds inflation-linked bond auction

May 08 10:00 Norway Details bond auction on 12 May

May 08 15:30 Italy Announces details of BTP

May 12 09:15 Norway Holds bond auction

May 13 09:10 Italy Auctions BTPs/CCTeus

May 13 09:30 Germany Eur 3bn Feb 2025 Bund

May 13 14:30 Sweden Details bond auction on 20 May

May 14 09:30 UK Auctions 2% 2020 Conventional Gilt

 

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