US Dollar Index Hit Over Two-Month High, Copper Prices Declined Overnight [SMM Copper Morning Comment]

Overnight, LME copper opened at $9,540.5/mt, initially rose to a high of $9,602.5/mt, then fluctuated downward throughout the session, reaching a low of $9,520/mt near the close, and finally settled at $9,520/mt, down 1.33%. Trading volume reached 22,000 lots, and open interest was 283,000 lots. Overnight, the most-traded SHFE copper 2411 contract opened at 76,340 yuan/mt, initially moved slightly upward before declining to a low of 76,380 yuan/mt, then rose to a high of 76,710 yuan/mt, and fluctuated throughout the session, finally closing at 76,590 yuan/mt, down 0.39%. Trading volume reached 29,000 lots, and open interest was 152,000 lots. Macro side, US Fed's Daly stated that the monetary policy remains restrictive and the Fed is working to reduce inflation. The market also expects the Fed to cut interest rates at a slower pace over the next year and a half and that Trump will win the election, boosting the US dollar. The US dollar index continued its upward trend, reaching a two-month high, which is bearish for copper prices. Additionally, international oil prices fell due to eased concerns over Iranian supply and a weakening demand outlook, dragging down copper prices. Fundamentally, supply side, today marks the last trading day for the SHFE copper 2410 contract. Traders are reassessing future price trends, with the market currently holding a bearish view on short-term premiums and discounts, leading to noticeable selling sentiment among traders and an increase in copper cathode spot supply. Conversely, consumption side, downstream sentiment remains cautious, with purchases mainly based on immediate needs, resulting in mediocre overall market transactions. Price-wise, the US dollar index continued to fluctuate at high levels, while domestic downstream consumption showed no significant improvement. Copper prices are expected to maintain a fluctuating trend today.