SHANGHAI, Mar. 8 (SMM) – On Thursday, the European Central Bank (ECB) announced to keep the interest rate unchanged at 0.75%, in line with market expectation. However, some traders earlier anticipated the ECB would adopt milder policies and bet the euro would finally slip. They thus repurchased positions sold earlier and helped the euro rebound by nearly 1%. Meanwhile, the US Labor Department reported that US initial jobless claims dropped to 340,000 last week, below 355,000 anticipated by markets and also the lowest since March 2008. US equity markets rebounded again following the release of favorable US economic data, with Dow Jones Industrial Average further hitting new historical highs. As such, LME copper prices rallied and touched a high of USD 7,789/mt before settling at USD 7,751/mt, a gain of USD 46/mt. LME copper stocks already exceeded 480,000 mt the same day.
Markets are also upbeat about the US non-farm payroll report due Friday evening. Hence, SMM believes that LME copper will challenge resistance at USD 7,800/mt after standing steadily above the 5-day moving average, with prices between USD 7,740-7,800/mt on Friday. Chinese A-share market will also rebound. SHFE copper prices will likely continue increases after starting slightly higher, and SHFE 1306 copper contract will hover in the RMB 56,500-57,000/mt range. Shanghai spot copper offers are estimated between discounts RMB 80/mt and premiums RMB 20/mt versus SHFE 1303 copper contract.