Copper prices were flat on Monday as investors appear to be waiting on the Fed and another round of talks between the U.S. and China. The red metal saw a small dip in overnight trading as a result of a slump in U.S. crude and a gain of 200 metric tons in LME copper stocks.
The Fed Meeting
Up first, the U.S. Federal Reserve meeting. The Fed starts its two-day meeting today. Experts predict the central bank will leave interest rates unchanged.
According to Reuters, the Fed is expected to hold rates steady after raising them in December for the fourth time in 2018. The U.S. central bank has indicated it will hike rates twice this year, but some officials have recently adopted a more dovish tone – meaning it is unlikely the Fed would take aggressive actions – for now.
U.S. and China Meeting
As well as the Fed meeting, the world will be watching as the next chapter of the ongoing trade negotiations between the U.S. and China is set to unfold this week. Chinese officials are to arrive in Washington tomorrow to continue trade talks with the U.S. aimed at resolving the long-running trade war between the two countries. Officials have until March 1 to reach a deal after which President Donald Trump has said he could move forward with fresh tariffs on Chinese imports.
“Copper is playing a wait-and-see game when it comes to the potential for a trade agreement between the U.S. and China,” says frequent tED contributor Andrew Hecht of Seeking Alpha. ”While optimism is taking other markets higher, copper is on the front lines of the issue because China is the world’s leading consumer of the red metal which rises and falls with expansion and contraction in the Chinese economy. A positive result from trade negotiations that lead to a framework for a deal could be just the medicine that Doctor Copper needs to move appreciably higher over the coming days and weeks.”
On Friday, the Labor Department is to publish its nonfarm payrolls report for January, which will offer insight into the overall health of the U.S. economy and the possible impact of the partial government shutdown. The consensus forecast is for a gain of 160,000 jobs after an impressive reading in December, when the economy added 312,000 jobs.
The U.S. is scheduled to publish advance figures on fourth-quarter gross domestic product on Wednesday, but the data could be delayed as a result of the recent shutdown.
Here is a look at significant events expected to affect the markets as put together by Investing.com.
Monday, January 28
The Bank of Japan is to publish the minutes of its latest policy-setting meeting.
European Central Bank President Mario Draghi is to testify about the economy and monetary policy before the European Parliament Economic and Monetary Affairs Committee, in Brussels.
Bank of England Governor Mark Carney is to speak at an event in London.
Tuesday, January 29
New Zealand is to publish trade figures.
The U.S. is to release a report on consumer confidence compiled by the Conference Board.
Wednesday, January 30
Australia is to publish inflation figures.
The U.K. is to release a report on net lending.
Germany is to release preliminary inflation numbers.
The advance estimate of U.S. fourth-quarter growth is scheduled to be published, but could be delayed in the wake of the recent government shutdown.
The U.S. is to publish the ADP nonfarm payrolls report as well as data on pending home sales.
The Federal Reserve is to announce its federal funds rate and hold a press conference to discuss the monetary decision at its first meeting of the year.
Thursday, January 31
China is to publish data on manufacturing and service sector activity.
The euro zone is to release a preliminary estimate of fourth-quarter growth as well as the latest unemployment figures.
Canada is to produce figures on monthly GDP growth and raw material price inflation.
The U.S. is scheduled to release figures on personal income and spending, as well as data on the core PCE price index and a look at business activity in the Chicago region.
Friday, February 1
China is to publish its Caixin manufacturing PMI.
The U.K. is to release data on activity in its manufacturing sector.
The euro zone is to publish preliminary inflation data.
The U.S. is to round up the week with the government nonfarm payrolls report for January along with a report from the Institute of Supply Management on manufacturing activity and revised figures on consumer sentiment from the University of Michigan.
Further Reading – Digging A Little Deeper2019, copper