Log in
Forgot password ?
Become a member for free
Sign up
Sign up
Dynamic quotes 

4-Traders Homepage  >  Commodities  >  LME Copper Cash       

Mes dernières consult.
Most popular
Analysis summary4-Traders Strategies

Macro economic environment is quickly changed

share with twitter share with LinkedIn share with facebook
share via e-mail
04/18/2012 | 03:12pm

The copper’s strong acceleration in January, when the metal gained about 11%, was blamed to good economic news. In two months the macroeconomic environment has quickly changed, in fact last week sharp fall was caused by Chinese gross domestic producer data. In fact China’s economy expanded 8.1% percent in the first quarter from year earlier, disappointing consensus expectations of an 8.4% outcome. This data is the lowest in almost three years and strongly weighted on the copper, seen China is the first consumer of this metal, absorbing 40% of total production. Yesterday International Monetary Fund, which boosted its growth outlook, restored copper’s strength.

We can see that the macroeconomics environment becomes increasingly uncertain, making commodities more and more sensitive to each economic news, especially those cyclic. Chinese growth will slowly accelerate also in the second half of the year, for this reason the government will intensify policy preparations by injecting cash and facilitating loans. This policy could give new power to investments, and consequently will increase copper demand. According to Andrew Harding, head of Rio Tinto’ copper unit, Chinese red metal demand may gain more than 8 percent annually in the next five years. In this context we note that the inventories in London reached the lowest level since 2008, while in Shanghai are on the highest for two years.

Graphically the asset is in bearish trend on the short-term. The last week’s downward movement pushed the copper outside of the USD 8320 / 8658 range, where the metal traded since January. Moving averages are bearish oriented, especially 20 periods moving average in daily data and the 50 periods in weekly data. Both macroeconomic uncertainty and technical pattern push us to forecast a downward trend’s perpetuation towards USD 7900 short-term support. This point could be a stepping stone for a possible rebound. This scenario is possible only if we have clarification of macro economic environment, which could arrive in the second half of the year, for our opinion.

Oscar Salza
© Zonebourse.com 2012
share with twitter share with LinkedIn share with facebook
share via e-mail

Disclaimer: The information, charts, data, views, or comments provided by SURPERFORMANCE SAS are intended for investors who have the necessary knowledge and experience to understand and appreciate the information contained within. These items are disseminated for personal reference only. They do not constitute an offer or solicitation to buy or sell financial products or services, nor an investment advice.
The use of the information disseminated takes place under the investor's sole responsibility, without recourse against SURPERFORMANCE SAS. SURPERFORMANCE SAS will not be liable, whether in contract, in tort, under any warranty, for errors, omissions, improper investments, or adverse evolution of markets.

Duration : Period : Day
LME Copper Cash Technical Analysis Chart | 4-Traders
Duration : Period : Week
LME Copper Cash Technical Analysis Chart | 4-Traders