SMM Morning Review - 2011/9/9 Copper Market

SHANGHAI, Sept. 9 (SMM) –The US Labor Department overnight announced the US initial jobless claims rose unexpectedly last week, dragging down futures markets and stock markets in Europe and the US. However, another announced data showed the US trade deficit for July was USD 44.81 billion, below the market anticipated USD 51 billion, while the revised trade deficit for June was USD 51.57 billion (with the previous figure USD 53.07 billion). The better-than-expected trade data lessened impacts from the weekly jobless claims figure by offering some hope for growth in the third quarter. In response, LME copper prices climbed to a high USD 9,160/mt after slightly rallying to early session levels. At the tail of trading, as Federal Reserve (Fed) Chairman Ben Bernanke said that the Fed would spare no efforts to boost the disappointingly weak economy and lower the unemployment rate, but failed to detail any possible steps from the policymakers, market investors were somewhat dismayed. The US dollar advanced after gaining some buying for a safe-haven. Later, the President of the European Central Bank (ECB) Jean-Claude-Trichet made comments on introduction of loose monetary policy in the Euro-zone area, sending the euro down below 1.40, and helping the US dollar index jump above 76 points. As a result, LME copper prices narrowed the gains, and closed at USD 9,109/mt.

The US President Obama this morning proposed to use USD 447 billion in the jobs plan to help boost the US economy and appealed the Congress to approve the plan of preferential tax policy for staff and enterprises. Multiple negative and positive factors, including expansion in the euro's declines, Obama's jobs plan and China's economic data to be announced this morning are struggling, so LME copper price are expected to move between USD 9,030-9,130/mt. In Chinese markets, Chinese stock markets fell below 2,500 points on the previous trading day, and will also be negatively affected by the down close of US equity markets overnight. SHFE copper prices will open slightly higher today, and will meet resistance during the process of climbing up, while SHFE 1111 copper contract prices will move in the RMB 67,000-68,300/mt band.