SHANGHAI, Mar. 29 (SMM) – The economic data announced by the US overnight indicate the country’s initial jobless claims and economic growth missed forecasts, but did improve from previous reading, helping the US stock market extend gains. Banks in Cyprus reopened after being closed for two weeks, helping the Dow Jones Index and S&P 500 hit record highs. Market risk aversion waned, sending the US dollar index below 83. Investors aggressively closed positions at the tail of trading since LME market will be closed on Friday and Monday and Chinese markets will be closed during April 4-5, causing LME copper to close at near an intraday low of USD 7,533/mt, down 1.4%. The proportion of cancelled LME copper warrants increased to 16.04%.
The final reading of the US 4Q GDP rose to 0.4%, due mainly to shrinking exports and forecast-beating commercial investments. Although the 0.4% growth was the lowest since 1Q 2011, it did rise from previous nearly zero growth. Factoring out sharp declines in inventories and government spending, the US economy still maintained mild growth momentum in 4Q last year. Many economists polled by Bloomberg expected a 0.6% growth in the US economy in the fourth quarter of 2012.
According to the US Labor Department, initial jobless claims in the week ending March 23 rose by 16,000 to 357,000, higher than the forecasted 339,000 by analysts surveyed by Market Watch. The seasonally adjusted insured unemployment during the week ending March 16 were 3.05 million, a drop of 27,000 from the previous week, the lowest since June 2008. The jobless claims during the past one month averaged 3.07 million each week, a decrease of 13,000 and also the lowest since June 2008.
The Cyprus’ central bank announced Wednesday details on capital controls to prevent savers from stripping the bank vaults clean when the doors open: withdrawals will be capped at 300 euros (251 pounds) per day, travelers may take no more than 3,000 euros abroad per trip.
LME market is closed today. The Shanghai Composite Index will remain weak, while SHFE 1307 copper contract prices should move within RMB 54,900-55,500/mt on Friday. In spot markets, spot copper supply will decrease, while downstream producers will only purchase modest amounts at low prices, with spot copper discounts expected between RMB 0-50 and premiums between RMB 0-50/mt.