SMM Copper Market Morning Review (2013-10-21)-Shanghai Metals Market

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SMM Copper Market Morning Review (2013-10-21)

Price Review & Forecast 09:59:47AM Oct 21, 2013 Source:SMM

SHANGHAI, Oct. 21 (SMM) – Upbeat earnings reports of Google and General Electric as well as encouraging Chinese GDP boosted risk appetite, driving a 0.65% rise in S&P 500 Index. Although the growth in China’s Q3 GDP met forecasts, markets were worried that the acceleration in China’s economic growth may be short-lived, tempering gains of commodity prices. Most investors believe that China’s economy will probably slow down in Q4. That being said, China will surely realize the 7.5% growth target for 2013 given the good market fundamentals. Market attention later shifted onto US non-farm employment report and China’s flash manufacturing PMI for October due to be announced this week. LME copper gained less favor and closed last Friday down USD 9/mt at USD 7,225/mt.

US Treasury bonds hit over USD 17 trillion last Friday. The Shanghai Stock Exchange (SEE) released October 18 its revised SEE Trading Rules, which was approved by the China Securities Regulatory Commission (CSRC). “T+0” will apply to bond ETF, gold ETF, etc., according to the modified trading rules. The new trading rules will come into force on December 9, 2013. This will benefit Chinese stock market today.           

China posted a 7.8% YoY growth in its GDP in Q3, with growing outpacing previous two quarters. Industrial value-added grew by 10.2% in September. The country also registered a 13.3% YoY growth in retail sales of social consumer goods in the same month. These indicators are within rational levels and signal stable growth in the Chinese economy, temporarily allaying concerns over a sharp downturn in the world’s second largest economy.  

US economic figures due to be announced last Friday were delayed again. Recent remarks by severe US Federal Reserve (Fed) Officials were in favor of keeping QE3 in place. Charles Evans, President of the Federal Reserve Bank of Chicago said he did not see enough economic data that would favor QE3 taper at the next policy meeting and warned against reducing financial risks at the expense of QE3 wind-down and interest rate hike. Better-than-expected Q3 earning reports of Google and Morgan Stanley fuelled a rally in US stocks. For example, S&P 500 Index hit new highs for two consecutive days and recorded its biggest weekly gain since July.  

The US dollar index lost 0.05%, a new 8-1/2-month low. Global stock markets generally closed up. Base metals on the London Metal Exchange were mixed.

Caution will rule the market before announcement of key economic data. LME copper is expected to move within USD 7,200-7,270/mt during Monday’s Asian trading hours. The Shanghai Composite Index will nudge up. SHFE 1401 copper contract will fluctuate between RMB 51,900-52,500/mt. In spot markets, both supply and demand will hold stable, with a contango of RMB 0-80/mt expected over SHFE 1311 copper contract. 

 

Key Words:  LME copper   SHFE copper  

SMM Copper Market Morning Review (2013-10-21)

Price Review & Forecast 09:59:47AM Oct 21, 2013 Source:SMM

SHANGHAI, Oct. 21 (SMM) – Upbeat earnings reports of Google and General Electric as well as encouraging Chinese GDP boosted risk appetite, driving a 0.65% rise in S&P 500 Index. Although the growth in China’s Q3 GDP met forecasts, markets were worried that the acceleration in China’s economic growth may be short-lived, tempering gains of commodity prices. Most investors believe that China’s economy will probably slow down in Q4. That being said, China will surely realize the 7.5% growth target for 2013 given the good market fundamentals. Market attention later shifted onto US non-farm employment report and China’s flash manufacturing PMI for October due to be announced this week. LME copper gained less favor and closed last Friday down USD 9/mt at USD 7,225/mt.

US Treasury bonds hit over USD 17 trillion last Friday. The Shanghai Stock Exchange (SEE) released October 18 its revised SEE Trading Rules, which was approved by the China Securities Regulatory Commission (CSRC). “T+0” will apply to bond ETF, gold ETF, etc., according to the modified trading rules. The new trading rules will come into force on December 9, 2013. This will benefit Chinese stock market today.           

China posted a 7.8% YoY growth in its GDP in Q3, with growing outpacing previous two quarters. Industrial value-added grew by 10.2% in September. The country also registered a 13.3% YoY growth in retail sales of social consumer goods in the same month. These indicators are within rational levels and signal stable growth in the Chinese economy, temporarily allaying concerns over a sharp downturn in the world’s second largest economy.  

US economic figures due to be announced last Friday were delayed again. Recent remarks by severe US Federal Reserve (Fed) Officials were in favor of keeping QE3 in place. Charles Evans, President of the Federal Reserve Bank of Chicago said he did not see enough economic data that would favor QE3 taper at the next policy meeting and warned against reducing financial risks at the expense of QE3 wind-down and interest rate hike. Better-than-expected Q3 earning reports of Google and Morgan Stanley fuelled a rally in US stocks. For example, S&P 500 Index hit new highs for two consecutive days and recorded its biggest weekly gain since July.  

The US dollar index lost 0.05%, a new 8-1/2-month low. Global stock markets generally closed up. Base metals on the London Metal Exchange were mixed.

Caution will rule the market before announcement of key economic data. LME copper is expected to move within USD 7,200-7,270/mt during Monday’s Asian trading hours. The Shanghai Composite Index will nudge up. SHFE 1401 copper contract will fluctuate between RMB 51,900-52,500/mt. In spot markets, both supply and demand will hold stable, with a contango of RMB 0-80/mt expected over SHFE 1311 copper contract. 

 

Key Words:  LME copper   SHFE copper