Copper price oscillates below $4.20, upbeat Chinese data warrants upside
|- Copper prices have turned sideways but are expected to resume their upside journey on solid China’s data.
- China’s Industrial Production has turned positive to 0.7% vs. -2.9% reported earlier.
- An expectation of a 75 bps rate hike by the Fed is backed by higher CPI reported last week.
Copper, futures on COMEX, have displayed a firmer responsive buying action after hitting a low of 4.1305 in the late New York session. The asset has turned sideways now after a responsive buying in which the market participants consider the asset a value bet. The inventory distribution in the rangebound move will scale the copper prices higher towards 4.2300.
A significant recovery in the copper prices is backed by a rebound in the positive market sentiment and the release of upbeat China’s economic data.
Investors are awaiting the announcement of the interest rate decision by the Federal Reserve (Fed), which is expected to remain on the extremely hawkish side as soaring inflation could be tamed by extremely tightening measures only. The odds of a rate hike by 75 basis points (bps) are fuelled by last week’s firmer inflation figures. The US dollar index (DXY) has remained firmer during these trading sessions on expectations of a higher interest rate announcement. The DXY displayed some exhaustion signals at open but has recovered a majority of its losses now as clouds of uncertain Fed policy loom again.
Meanwhile, upbeat China’s economic data despite the two-month period of serious lockdown in Shanghai and Beijing has bolstered the copper bulls. China’s National Bureau of Statistics has reported the annual Retail Sales at -6.7%, much better than the expectation of -7.1% and the prior print of -11.1%. While the Industrial Production has turned positive as it has landed at 0.7%, significantly higher than the consensus of -0.7% and the former figure of -2.9%.
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