Copper Follows Equities Higher on Stimulus Hopes-Shanghai Metals Market

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Copper Follows Equities Higher on Stimulus Hopes

Industry News 09:00:48AM Jun 15, 2012 Source:SMM

Jun 14, 2012 (Dow Jones) NEW YORK--Copper futures finished in positive territory Thursday, as anticipation of new liquidity measures set a stronger tone in equity markets and optimism spilled across to commodities.

The most actively traded contract, for July delivery, settled up 1.50 cents, or 0.5%, at $3.3545 a pound on the Comex division of the New York Mercantile Exchange.

The Standard & Poor's 500 stock index was recently up 0.8% at 1325.7, while crude oil was recently up 1.2% at $83.64 a barrel.

Investors are expecting "some kind of cooperative effort [between Europe and the U.S.] that will make people comfortable with putting money back into these markets," said Adam Klopfenstein, a market strategist with Archer Financial Services.

The spread of sovereign debt problems across Europe and fresh signs of slowing economic growth in the U.S. have dominated market attention in recent weeks. However, both copper futures and equities have turned higher as investors bet that new easing measures will soon be implemented.

Copper and stocks often move in the same direction because both assets are sensitive to shifts in the economic outlook. Copper's applications in construction and manufacturing link its price to the pace of growth.

Earlier in the day, copper prices had wobbled around unchanged on data showing U.S. weekly jobless claims rose last week. Signs of continued weakness in the labor market have put pressure on copper prices in recent months as unemployed consumers have less income to spend on goods that contain copper such as cars, household appliances and electronics.

Meanwhile, the U.S. consumer-price index fell in May for the first time in two years. The closely watched measure of inflation declined to a seasonally adjusted 0.3% in May from the prior month, the largest monthly decline since December 2008.

However, while recent U.S. data have pointed to slower growth and likely weaker demand for copper, hopes persist that the Federal Reserve will introduce new measures at its June 19-20 policy setting meeting.

"Speculation is the Fed will need to add more liquidity to the system to help jump start the growth which had been evident the first quarter of 2012 but has since waned," traders at RBC Capital Markets wrote in a note to clients.

Copper settlements (ranges include electronic and pit trading):
June $3.3540; up 1.40 cents; Range $3.3260-$3.3590
July $3.3545; up 1.50 cents; Range $3.3185-$3.3595

 

Price

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62% Fe Fines (Qingdao Port): IOPI62
Oct.16
741.0
-1.0
(-0.13%)
62% Fe Fines (Qingdao Port, CFR Equiv.)
Oct.16
96.9
-0.2
(-0.20%)
58% Fe Fines (Qingdao Port): IOPI58
Oct.16
635.0
-15.0
(-2.31%)
58% Fe Fines (Qingdao Port, CFR Equiv.)
Oct.16
83.4
-2.1
(-2.47%)
65% Fe Fines (Qingdao Port): IOPI65
Oct.16
778.0
2.0
(0.26%)

Copper Follows Equities Higher on Stimulus Hopes

Industry News 09:00:48AM Jun 15, 2012 Source:SMM

Jun 14, 2012 (Dow Jones) NEW YORK--Copper futures finished in positive territory Thursday, as anticipation of new liquidity measures set a stronger tone in equity markets and optimism spilled across to commodities.

The most actively traded contract, for July delivery, settled up 1.50 cents, or 0.5%, at $3.3545 a pound on the Comex division of the New York Mercantile Exchange.

The Standard & Poor's 500 stock index was recently up 0.8% at 1325.7, while crude oil was recently up 1.2% at $83.64 a barrel.

Investors are expecting "some kind of cooperative effort [between Europe and the U.S.] that will make people comfortable with putting money back into these markets," said Adam Klopfenstein, a market strategist with Archer Financial Services.

The spread of sovereign debt problems across Europe and fresh signs of slowing economic growth in the U.S. have dominated market attention in recent weeks. However, both copper futures and equities have turned higher as investors bet that new easing measures will soon be implemented.

Copper and stocks often move in the same direction because both assets are sensitive to shifts in the economic outlook. Copper's applications in construction and manufacturing link its price to the pace of growth.

Earlier in the day, copper prices had wobbled around unchanged on data showing U.S. weekly jobless claims rose last week. Signs of continued weakness in the labor market have put pressure on copper prices in recent months as unemployed consumers have less income to spend on goods that contain copper such as cars, household appliances and electronics.

Meanwhile, the U.S. consumer-price index fell in May for the first time in two years. The closely watched measure of inflation declined to a seasonally adjusted 0.3% in May from the prior month, the largest monthly decline since December 2008.

However, while recent U.S. data have pointed to slower growth and likely weaker demand for copper, hopes persist that the Federal Reserve will introduce new measures at its June 19-20 policy setting meeting.

"Speculation is the Fed will need to add more liquidity to the system to help jump start the growth which had been evident the first quarter of 2012 but has since waned," traders at RBC Capital Markets wrote in a note to clients.

Copper settlements (ranges include electronic and pit trading):
June $3.3540; up 1.40 cents; Range $3.3260-$3.3590
July $3.3545; up 1.50 cents; Range $3.3185-$3.3595