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Industrial and Base Metals Weekly Fundamental Analysis, May 11 – 15, 2015 Forecast

Weekly Analysis and Recommendations (Copper forecast):

Copper soared during the week to trade above the 2.92 range and dipped on the last day of the week to trade at 2.915. Palladium soared on Friday to 798.70 gaining $12.95. Copper was supported by expectations of further stimulus to boost economic growth in top consumer China, but gains were capped by equity market losses and a stronger dollar.’

“Metals are looking for direction from the PBOC (China’s central bank),” said Oliver Fry, a portfolio manager at Ebullio Capital Management. “We expect more action.”

China’s central bank has already eased monetary policy by cutting interest rates and reducing the amount banks must hold as cash to try to spur bank lending. Some expect China to resort to fiscal stimulus.

Expectations have been that imports would grow faster this year as China’s blast furnaces make the most of historically low prices, but the modest pace suggests soft domestic demand.

Steel consumption in China fell last year for the first time since 1995 after years of overcapacity and low profitability and a pollution clampdown by Beijing could see as output decline as much as 4% this year. And that’s despite soaring steel exports from China, which has jumped by nearly a third so far this year compared to the same period in 2014.

The major exporters are also finding it more difficult to displace high cost Chinese miners who have been granted tax breaks by Beijing to see out the current slump.

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 and we provide daily updates and outlooks.

copper weekly

Major Economic Events for the week that you should be monitoring:

MONDAY, MAY 11

UK

GBP

BoE Asset Purchase Facility

£375

£375

UK

GBP

BoE Interest Rate Decision

0.5%

0.5%

TUESDAY, MAY 12

UK

GBP

NIESR GDP Estimate (3M) (Apr)

0.6%

WEDNESDAY, MAY 13

DE

EUR

Gross Domestic Product (QoQ) (Q1)

0.7%

EMU

EUR

Gross Domestic Product (YoY) (Q1)

0.9%

UK

GBP

BOE’s Governor Carney speech

UK

GBP

Bank of England Quarterly Inflation Report

EMU

EUR

ECB Monetary Policy Meeting Accounts

US

USD

Retail Sales ex Autos (MoM) (Apr)

0.4%

US

USD

Retail Sales (MoM) (Apr)

0.9%

FRIDAY, MAY 15

JP

JPY

Bank of Japan Governor Kuroda Speech

Government Bond Auctions

Date Time Country

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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