There were only two overlapping trading days for SHFE copper and LME copper this past week. On Monday, SHFE copper was supported at the 73,000 yuan/ton mark due to the positive manufacturing data in March in China. On Tuesday, LME copper climbed above 9,000 US dollars/ton. As the manufacturing and service industry data released by China were both quite impressive and the recent market bullish sentiment on copper prices was still boosting the market, copper prices once again hit previous highs on Wednesday, with LME copper breaking through 9,200 US dollars/ton and SHFE copper breaking through 74,000 yuan/ton. SHFE closed due to China's Qingming Festival. LME copper set a new high.
Review of macro data and market performance during the Qingming Festival:
It is worth noting that in less than a year, Yellen visited China again, during which she mentioned topics such as the impact of China's overcapacity on the global economy and emphasized the areas of cooperation between China and the United States. It is reported that after Yellen, US Secretary of State Blinken also plans to visit China in a few weeks. Sino-US relations have attracted much attention. The exchange rate of the yuan has recently stabilized around 7.23.
On Thursday, March PMI data for France, Germany, the eurozone and other countries were released. The eurozone's composite PMI for March was 50.3, returning to the expansion range. The drag of eurozone exports slowed to the lowest level in nearly a year. After the data was released, the euro against the dollar was relatively stable. The number of United States job cut announcements increased to 90,309 in March, according to the Challenger, and the number of initial jobless claims in the United States in the week ending March 30 was 221,000, both higher than the previous value. Before the release of non-farm data, it was beneficial to risky assets. On Thursday, LME copper hit a high of $9,397.5 a tonne, setting a nearly 14-month high.
On Friday, the market focused on the U.S. employment data. Non-farm payrolls increased by 303,000 in March, far exceeding market expectations of 200,000 and the previous 270,000. The unemployment rate was 3.8%, lower than the previous value and market expectations of 3.9%. The market once again lowered the time for the Fed's first interest rate cut, and the number of rate cuts may be less than three times; after the data was released, the U.S. dollar index only rose briefly, approaching 104.7 points, and then gave up the gains and returned to fluctuate around 104.3 points.
Gold, crude oil and copper futures have not been greatly affected.
Affected by factors such as geopolitics, the international gold price has continued to rise, and the high has reached $2,350 per ounce. After the release of non-farm data, the Federal Reserve's expectations for a rate cut this year have fallen, but this has not affected the bullish sentiment on gold.
In crude oil, wars in Eastern Europe and the Middle East have reignited concerns about supply disruptions. The news that OPEC+ member countries decided to voluntarily cut production by 2.2 million barrels per day at least in the second quarter to increase crude oil prices has become a support for oil prices in the near term.
The rise in gold, crude oil, copper and other metals has made the market worry that US inflation will be difficult to reach the 2% target in the short term. If the US CPI data for March rises as expected next week, the probability of the first interest rate cut in June is expected to decline again.
SHFE copper will most likely fluctuate around 74,000 yuan/ton after the Qingming Festival. LME copper prices may move between 9200-9300 US dollars/ton.
