Overnight Copper Prices Declined, Data Supported US Fed's Cautious Interest Rate Cut [SMM Copper Morning Comment]

Overnight, LME copper opened at $9,531.5/mt, initially rising to an intraday high of $9,580/mt before declining throughout the session, touching a low of $9,493.5/mt near the close, and finally settling at $9,547/mt, down 0.13%. Trading volume reached 16,000 lots, and open interest was 275,000 lots. Overnight, the most-traded SHFE copper 2412 contract opened at 76,670 yuan/mt, initially hitting a high of 767,100 yuan/mt before fluctuating lower throughout the session, touching a low of 76,100 yuan/mt near the close, and slightly rebounding to finally settle at 76,300 yuan/mt, down 0.25%. Trading volume reached 39,000 lots, and open interest was 157,000 lots. Macro side, the US core PCE price index YoY for September recorded 2.7%, higher than the expected 2.6% and unchanged from the previous value, boosting the US dollar index and negatively impacting copper prices. At the same time, the initial jobless claims for the week ending October 26 in the US recorded 216,000, lower than the expected 230,000, with the market still betting on a 25 basis point interest rate cut by the US Fed in November. Domestically, China's PMI for October was 50.1%, up 0.3 percentage points from the previous month, marking the second consecutive month of MoM increase, indicating that stimulus policies are helping the economy recover, providing some support for copper prices at the bottom. Fundamentally, copper prices continue to fluctuate rangebound, and on the last trading day of October, overall market trading sentiment was weak. However, some downstream buyers were bullish on premiums and restocked at lower prices. As of Thursday, October 31, SMM copper inventory in major regions nationwide slightly decreased by 300 mt from Monday to 209,800 mt, marking the second consecutive week of destocking. Total inventory was 146,100 mt higher compared to 63,700 mt in the same period last year. Today, driven by restocking demand, market transactions are expected to warm up. In terms of prices, the Standing Committee of the National People's Congress of China will meet from November 4 to 8. Before the policy implementation, the overall macro sentiment remains positive, and copper prices are expected to continue fluctuating rangebound today.