SMM Morning Review - 2010/1/8 Copper Market

SHANGHAI, Jan. 8 (SMM) -- China's Central Bank yesterday unexpectedly raised the auction yield of three-month bills from 1.328% to 1.3684%. It is the first time for China's Central Bank to lift a key interest rate in five months. The move is seen by market players as a significant step to tighten liquidity, triggering market fears. As a result, crude oil prices weakened, while the US dollar strengthened, and LME copper prices fell back in response. Profit-taking was also one major reason behind price declines. LME copper prices at last ended at USD 7,535/mt, down USD 140/mt.

A particular attention should be paid to the non-agricultural employment rate in the US to be announced on Friday. SMM believes LME copper prices will likely experience corrections in the short term, with low upward momentum to move high.

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