SHANGHAI, Nov. 20 (SMM) – Three-month copper on the London Metal Exchange rebounded during the European session and closed Tuesday USD 2/mt higher at USD 6,965/mt, with thin trading activity.
Monetary policy may remain highly accommodative long after economic thresholds for the Fed’s interest rate hike have been crossed, said Yellen, President Obama’s nominee to lead the Fed, arguing that an ultra-easy monetary policy was necessary to help the US economy recover. Fed Chairman Bernanke agreed with Yellen, saying that the US economy is still a long way from what the Fed hopes to see and that it will take some time before the Fed brings monetary policy back to normal. Recent dovish remarks by several Fed officials reinforced expectations that the Fed will defend QE3.
The People’s Bank of China (PBOC) will increase the role of market exchange rates and establish a managed floating exchange-rate system based on market supply and demand as well as further widen the yuan's daily trading band so as to boost the currency's convertibility under capital account, Zhou Xiaochuan, PBOC governor said Tuesday. .
Germany’s ZEW economic sentiment jumped to its highest level since October 2009 at 54.6 in October, but the current conditions index dropped to 28.7. Italy’s industrial orders climbed 1.6% MoM and 7.3% YoY in September, the biggest year-on-year growth since May 2011.
The US dollar index shed 0.11%, while the euro gained 0.28% against the greenback. Global stock markets mostly fell. All base metals on the LME, except tin, ended in positive growth territory.
LME copper is expected to rebound and move within USD 6,930-7,000/mt during Wednesday’s Asian trading hours. The Shanghai Composite Index will creep higher. SHFE 1402 copper contract will fluctuate between RMB 49,700-50,300/mt. In spot markets, downstream producers will hold to the sidelines against rising SHFE copper. A premium of RMB 100-220/mt is expected over SHFE 1312 copper contract.