SHANGHAI, Aug. 1 (SMM) –Last Friday evening, the US announced a set of economic data including 2Q preliminary annual GDP, Chicago PMI and Michigan Consumer Sentiment Index, which were all weak and below market expectations and the previous data. In response, LME copper prices dived twice on that evening, declining to test USD 9,700/mt, but then got support from failed improvement in tightening copper supply in Chile. Coupled with investor's cautious sentiment due to uncertainties in the US debts, the US dollar index slid to a low level of 73.716 and LME copper prices rallied gradually at the tail of trading. Finally, LME copper prices closed slightly higher, up USD 20/mt, and trading volumes continued to improve compared with early stages.
There was news in this morning that the two US political parties have neared an agreement to avoid defaults, increasing market hope in reaching a deal very soon. In this context, the US dollar tends to rebound slightly, but support at the moving averages for the Euro will limit its gains. As a result, LME copper prices will open higher, but will meet resistance to move higher as official news in the morning saying strike by workers at Chilean Collahuasi copper mine has ended, and the low-end support will fall below the 5-day moving average of USD 9,830/mt, with prices expected to move between USD 9,800-9,900/mt during Monday's Asian trading hours. In domestic market, the low-end SHFE three-month copper contract prices will be slightly higher than that of last Friday, and SHFE 1110 copper contract prices will move between RMB 72,700-73,500/mt.