Those of us with copper on the mind are in an overall upbeat mood to start the week, thanks in part to a strong U.S. jobs report released last Friday, and mainly on the idea that it looks like the U.S. and China are moving closer to a trade deal as the early March deadline for an agreement draws closer. U.S. and Chinese officials are set to meet again in China in mid-February, after meeting last week in Washington, D.C.
“The most significant issue facing markets across the globe is the current trade dispute between the U.S. and China that has created a wave of protectionist moves,” states Andrew Hecht of Seeking Alpha. “Commodities are on the front lines when it comes to tariffs and retaliatory trade moves, and last week, the U.S. Fed injected some optimism into the asset class when they backed off their hawkish approach to monetary policy. However, it will be the trade issue that either ignites raw material prices further in the coming weeks or weighs on them as we have seen during the second half of 2018.”
The world will be watching President Donald Trump’s State of the Union address tonight. The speech was initially scheduled for Jan. 29, but was delayed as a result of the temporary government shutdown.
President Trump is expected to keep up the pressure for the border wall and may renew calls for infrastructure spending.
As the rest of the week unfolds, investors will be tracking movements in the U.S. dollar and anxiously waiting to hear comments from a number of Federal Reserve officials, which may further reinforce expectations for a pause in its rate hike cycle after last week’s Fed meeting.
Having signaled further interest rate rises as recently as December, the Fed surprised investors last week by putting plans for further rate hikes on hold and pledging to be “patient” on further moves, citing muted inflation and rising risks to global economic growth.
Market watchers will be tuning in to remarks by Cleveland Fed President Loretta Mester on Monday and St. Louis Fed President James Bullard on Friday. Fed Chairman Jay Powell is due to speak on Wednesday, but it is unclear if his remarks will address monetary policy.
The red metal opened for trading this morning at $2.77 a pound. Markets in China are closed for the week for the Lunar New Year holiday. In addition to the Chinese New Year, here is our weekly look at significant events likely to affect the markets as compiled by Investing.com.
Monday, February 4
Australia is to release data on building approvals.
The U.K. is to publish survey data on construction sector activity.
The euro zone is to release figures on producer price inflation.
The U.S. is to report on factory orders.
Cleveland Fed President Loretta Mester is to speak.
Tuesday, February 5
Australia is to release data on trade and retail sales. In addition the Reserve Bank of Australia is to announce its latest interest rate decision and publish a rate statement.
The U.K. is to release survey data on service sector activity.
The euro zone is to report on retail sales.
The Institute of Supply Management is to release data on non-manufacturing activity.
President Donald Trump will deliver the State of the Union address before Congress.
Wednesday, February 6
RBA Governor Philip Lowe is to speak at an event in Sydney.
In the euro area, Germany is to produce data on factory orders.
Canada is to publish data on building permits.
Fed Chairman Jerome Powell is to speak at an event in Washington.
Thursday, February 7
New Zealand is to release its latest employment report.
Germany is to publish figures on industrial production.
The European Union is to release its economic forecasts for the next six months.
The Bank of England is to announce its latest interest rate decision and publish a rate statement.
The U.S. is to publish the weekly report on initial jobless claims.
Friday, February 8
Japan is to release data on average cash earnings.
St. Louis President James Bullard is to speak at an event at St. Cloud State University.
Canada is to round out the week with its latest employment report.
Further Reading
Copper to rally by 10% over next 3 – 6 months says Citi
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