SHANGHAI, Apr. 13 (SMM)–In early US and European trading session on Thursday, China announced its bank loans exceeded RMB 1 trillion in March to stand at RMB 1.01 trillion, well above market expectations and also a 14-month high, a signal that the central bank's move of cut in the reserve requirement ratio to stimulate the economy already took some effects. Markets thus believed that China's economy would achieve a soft landing and have good growth prospects. Besides, Italian three-year bond yields was later reported to soar by 1% in April from the previous month, but both Italian and Spanish 10-year bond yields fell, indicating that investor worries over the European debt crisis alleviated some over the near term. Christine Lagarde then reiterated the International Monetary Fund (IMF) needed to get more sources to help its member states to tide over the crisis, meaning the IMF would probably make substantial progress in increasing bailout funds. Markets were also positive that global central banks would introduce stimulus policies, pushing the euro and European stock markets higher. Hence, commodity markets rallied, with copper prices continuously trending higher after breaking resistance at USD 8,100/mt. At the tail of trading, the US announced its trade deficit narrowed as exports in February hit a record high, an indication of better economic conditions for 2Q. At the meanwhile, the US announced the initial jobless claims slid last week, which helped US equity markets surge with the Dow Jones Industrial Average rebounding to near 13,000. LME copper prices directly challenged resistance at USD 8,200/mt as a consequence to touch as high as USD 8,238/mt before finally settling at USD 8,210/mt, a gain of more than 2%.
Market focus has shifted to China which will release its latest GDP data today, which is expected by investors to fall sharply. Combined with resistance at the 5-day moving average of USD 8,180/mt, there is limited upside room for LME copper prices, which will move between USD 8,150-8,250/mt during Friday's Asian trading session. Chinese stock markets will keep strong, which can help SHFE copper prices open higher. However, SHFE copper prices will fall after initially rising due to pressures at RMB 59,000/mt, while SHFE 1207 copper contract prices will fluctuate in the RMB 58,500-59,200/mt range. Spot copper premiums are estimated between positive RMB 20-100/mt versus SHFE current-month copper contracts.