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Copper Tries to Claw Back

Copper Tries to Claw Back

The price of copper will look to make it two positive days in a row after last week’s trade of tariffs sent the price tumbling. The 4th of July holiday couldn’t light a fire under copper last week as the red metal finished down nearly 5%. Copper opened this morning at $2.82 a pound.

The United States slapped $34 billion worth of tariffs on top metals consumer China on Friday. China quickly responded in kind. The knee-jerk reaction to the tariff tiff sent markets, specifically copper, tumbling on fears that the exchange of tariffs would throw a wet towel on demand for copper.

“Valuations of metal stocks are likely to remain under pressure, given the twin overhang of trade brawls and a strengthening U.S. dollar,” Edelweiss Securities analyst Amit Dixit told the Economic Times.

The red metal corrected slightly on Monday and saw some positive gains in early-morning overseas trading to give investors hope that it will be business as usual despite the standoff between the U.S. and China.

Business as Usual it is

Some things never change – the Fed and the U.S. dollar are still impacting copper.

Among the smoke of the 4th of July holiday and the tariff situation, the Federal Reserve Open Market Committee released the minutes from their June meeting where they hiked the Fed Funds rate by 25 basis points. The central bank added a fourth interest rate hike of one-quarter of one percent to their agenda for 2018. Experts predict that by the end of the year, the Fed Funds rate will likely stand at 2.24-2.50 percent.

The U.S. Dollar is also weighing in on copper. The dollar slid lower against a currency basket on Friday after data showing that while the U.S. economy created more jobs than expected in June, wage growth rose at a slower than expected pace and the unemployment rate ticked higher.

Copper is trying to snap its worst four-week stretch since 2011. Through Friday, the red metal has plummeted 15% after hitting a four-year high back on June 7.

This week’s U.S. inflation report on Thursday is the highlight of Investing.com’s look at significant events likely to affect the price of copper. Here is the complete list:

Tuesday, July 10

Australia is to release data on business confidence.

China is to report on consumer price inflation.

The UK is to release monthly data on economic growth, along with figures on manufacturing production and trade.

The ZEW Institute is to report on German economic sentiment.

Canada is due to release data on building permits.

Wednesday, July 11

ECB head Mario Draghi is to speak at the opening of the bank’s statistics conference in Frankfurt.

The U.S. is to release data on producer price inflation.

The Bank of Canada is to announce its benchmark interest rate and publish a rate statement which outlines economic conditions and the factors affecting the monetary policy decision. The announcement is to be followed by a press conference.

BoE Governor Mark Carney is to speak at an event in Boston.

New York Fed President John Williams is to speak at an event in Brooklyn.

Thursday, July 12

The ECB is to publish the minutes of its latest monetary policy meeting.

Canada is to report on new house price inflation.

The U.S. is to release data on consumer price inflation and jobless claims.

Friday, July 13

China is to publish trade data.

The U.S. is to round out the week with preliminary data on consumer sentiment.

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Jim Williams

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