SMM Morning Review - 2012/6/21 Copper Market

Price Review & Forecast 09:44:29AM Jun 21, 2012 Source:SMM

SHANGHAI, Jun. 21 (SMM) – Three parties in Greece reached an agreement on forming the coalition government on Wednesday, so market worries over a Greek exit alleviated temporarily. However, German Chancellor Angela Merkel doubted about direct sovereign debt purchases, depressing market speculation that the new Greek government would hint Germany had achieved progress in stemming the Eurozone debt crisis. In response, the euro fell from a nearly one-month high and continued to drag down the financial market. Besides, the closely watched Fed's policy meeting finally yielded results in the evening. The Fed announced to extend bond buying program known as "Operation Twist" through the end of the year, raising the money amount by USD 267 billion. This disappointed investors who had earlier anticipated a third round of quantitative easing, believing the Fed's move was not strong enough to boost the economy. In consequence, LME copper retreated to an intraday low of USD 7,450/mt. However, as Bernanke later said the Fed would consider additional measures to lift the economy, which helped US equity markets rally. LME copper thus moved away from previous lows and finally ended at USD 7,504/mt, still a drop of USD 104/mt.  
 
Market focus will shift to China's HSBC PMI data, which is expected to remain below the 50 mark. This will weigh on the already weak copper markets. Combined with resistance at above the 5-day moving average, SMM holds the view LME copper will fluctuate feebly between USD 7,450-7,530/mt during Thursday's Asian trading session. The Shanghai Composite Index will suffer pressure at 2,300. SHFE copper will open down and then fluctuate, with investors expected to shun risks ahead of the Dragon Boat Festival, and SHFE 1210 copper contract will hover in the RMB 54,200-54,800/mt range. Spot copper premiums are estimated between positive RMB 270-350/mt versus SHFE 1207 copper contract.
 

SMM Morning Review - 2012/6/21 Copper Market

Price Review & Forecast 09:44:29AM Jun 21, 2012 Source:SMM

SHANGHAI, Jun. 21 (SMM) – Three parties in Greece reached an agreement on forming the coalition government on Wednesday, so market worries over a Greek exit alleviated temporarily. However, German Chancellor Angela Merkel doubted about direct sovereign debt purchases, depressing market speculation that the new Greek government would hint Germany had achieved progress in stemming the Eurozone debt crisis. In response, the euro fell from a nearly one-month high and continued to drag down the financial market. Besides, the closely watched Fed's policy meeting finally yielded results in the evening. The Fed announced to extend bond buying program known as "Operation Twist" through the end of the year, raising the money amount by USD 267 billion. This disappointed investors who had earlier anticipated a third round of quantitative easing, believing the Fed's move was not strong enough to boost the economy. In consequence, LME copper retreated to an intraday low of USD 7,450/mt. However, as Bernanke later said the Fed would consider additional measures to lift the economy, which helped US equity markets rally. LME copper thus moved away from previous lows and finally ended at USD 7,504/mt, still a drop of USD 104/mt.  
 
Market focus will shift to China's HSBC PMI data, which is expected to remain below the 50 mark. This will weigh on the already weak copper markets. Combined with resistance at above the 5-day moving average, SMM holds the view LME copper will fluctuate feebly between USD 7,450-7,530/mt during Thursday's Asian trading session. The Shanghai Composite Index will suffer pressure at 2,300. SHFE copper will open down and then fluctuate, with investors expected to shun risks ahead of the Dragon Boat Festival, and SHFE 1210 copper contract will hover in the RMB 54,200-54,800/mt range. Spot copper premiums are estimated between positive RMB 270-350/mt versus SHFE 1207 copper contract.