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Copper Today – Focus is on France

By Jim Williams

Tous les regards sur la France. Translation : All eyes are on France.

French presidential candidates Emmanuel Macron (pictured left) and Marine Le Pen (right). Photo from www.bbc.com.

The global economy, not only those with a vested interest in the red metal, is keeping watch on the election process in France. While most copper investors don’t expect the same meteroric impact as the U.S. Presidential election this past November, the upcoming runoff in May could shape the global market – especially the EU – depending on which candidate wins.

Sunday, French voters narrowed the presidential field from 11 candidates down to two – pro-EU candidate, and relative political newcomer, Emmanuel Macron will face off against far-right rival Marine Le Pen in a deciding vote next month.

“There’s a bit of a risk-on mood after the outcome of the first round of the presidential election in France, which has lent some buoyancy to the prices,” Commerzbank analyst Daniel Briesemann told Reuters.

Angel Commodities’ daily forecast for copper even has a French twist. The investment agency predicts higher trading today based off Sunday’s election and “to rising prospects of victory of pro-growth centrist Emmanuel Macron in the French elections.”

While France is currently the epicenter for investors, the world is still watching to see what happens in North Korea, and here in the U.S. Tensions escalated again this morning as North Korea continues to flex its military muscle by conducting a long-range artillery drill. This comes on the 85th anniversary of the founding of the North Korean military. This exercise is happening as the U.S. sends a nuclear submarine to the region, docking in nearby South Korea. Plus, President Donald Trump is expected to announce his tax reform plan tomorrow. Depending on which way the Administration goes, so goes the economy – possibly even overshadowing what is going on in France.

Frequent tED contributor Andrew Hecht of Seeking Alpha looks at the broad outlook of the red metal. “The real test for copper will come in the weeks ahead,” states Hecht. “All of these industrial metals may now be waiting for actual legislation for infrastructure rebuilding in the U.S. and evidence of economic growth in China. However, for now, it seems that a technical correction is underway and the price of copper seems destined to at least visit a new low for 2017 and perhaps a test of a support level that it has not seen since the early days of last November.” Or, since the last major presidential election.

We may have to wait a couple of weeks to see what kind of impact the French election has on the economy. It is doubtful investors will go out on a limb in anticipation the current favorite will win the May election. As you may recall, the presumed favorite going into the U.S. election in November ended up not winning – sending copper prices soaring.

Again, tous les regards sur la France. At least until May 7!


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