Can Chinese support lift copper prices? [Video]

Giles Coghlan LLB, Lth, MA Financial Source

China’s outlook has been buoyed over recent days by a series of positive stories. The reduction of some Covid restrictions by the National Health Commission, rumours of China planning its exit from Covid Zero, a 16-point property plan to reduce the chances of a property sector collapse, and the thawing of some US-China tensions have all helped lift sentiment.

This positive sentiment can support expectations of more demand for industrial metals from China. China is the world’s biggest user of copper, which is mainly used in construction, so this could mean the range of China’s support measures provides support for copper prices over the coming weeks.

Notice how, over the last 25 years, between November 20 and February 28, copper has gained 17 times for an average of 5.57%. So, although the seasonals are not the strongest, there is still a strong bias for strength. Will this bias, plus Chinese stimulus and re-opening hopes, boost copper prices this year?

Major trade risks: The major trade risk here is that China has a widespread Covid outbreak which reduces economic activity once again.

Learn more about HYCM

Author

Giles Coghlan LLB, Lth, MA

Financial Source

Giles is the chief market analyst for Financial Source. His goal is to help you find simple, high-conviction fundamental trade opportunities. He has regular media presentations being featured in National and International Press.

EUR/USD stays defensive below 1.1900 as USD recovers

EUR/USD trades in negative territory for the third consecutive day, below 1.1900 in the European session on Thursday. A modest rebound in the US Dollar is weighing on the pair, despite an upbeat market mood. Traders keep an eye on the US weekly Initial Jobless Claims data for further trading impetus.

GBP/USD holds above 1.3600 after UK data dump

\GBP/USD moves little while holding above 1.3600 in the European session on Thursday, following the release of the UK Q4 preliminary GDP, which showed a 0.1% growth against a 0.2% increase expected. The UK industrial sector activity deteriorated in Decembert, keeping the downward pressure intact on the Pound Sterling.

Gold sticks to modest intraday losses as reduced March Fed rate cut bets underpin USD

Gold languishes near the lower end of its daily range heading into the European session on Thursday. The precious metal, however, lacks follow-through selling amid mixed cues and currently trades above the $5,050 level, well within striking distance of a nearly two-week low touched the previous day.

Cardano eyes short-term rebound as derivatives sentiment improves

Cardano (ADA) is trading at $0.257 at the time of writing on Thursday, after slipping more than 4% so far this week. Derivatives sentiment improves as ADA’s funding rates turn positive alongside rising long bets among traders.

A tale of two labour markets: Headline strength masks underlying weakness

Undoubtedly, yesterday’s delayed US January jobs report delivered a strong headline – one that surpassed most estimates. However, optimism quickly faded amid sobering benchmark revisions.

Sonic Labs’ vertical integration fuels recovery in S token

Sonic, previously Fantom (FTM), is extending its recovery trade at $0.048 at the time of writing, after rebounding by over 12% the previous day. The recovery thesis’ strengths lie in the optimism surrounding Sonic Labs’ Wednesday announcement to shift to a vertically integrated model, aimed at boosting S token utility.