Free Trial
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
COMMODITIES
- Even though the recent USD weakness following Powell's speech at Jackson Hole last week generated some support for copper, the industrial metal has been constantly reaching lower highs since its peak reached on May 10.
- The rising uncertainty over a range of risk factors (Delta variant, falling growth expectations) combined with the deceleration in Chinese activity since February have been weighing on copper, which could experience further weakness as Fed taper nears.
- In addition, traders have historically shown less interest for copper as an inflation hedge; the industrial metal is also sensitive to downward revisions in real growth expectations.
- This chart shows the average monthly performance of 10 of the most traded commodities since 1980 (Times series start in 1983 for oil, 1989 for copper and 1990 for Nat gas) when inflation is accelerating (i.e. 1Y change in CPI inflation is positive).
- Interestingly, oil and Nat gas come at the top, averaging 1.9% and 1.7% in monthly returns.
- Copper is currently testing its 100DMA at 439.57; a break above that level would open the door for a move up to 446.50, the high of its LT downward trending channel. On the downside, first support stands at 431.87 (50DMA), followed by 421.80. Key support remains at 407.24 (200DMA).
Source: Bloomberg/MNI
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
We are facing technical issues, please contact our team.
ok
Your request was sent sucessfully! Our team will contact you soon.
ok