CPI Data Meets Expectations, US Fed's December Interest Rate Cut Is Almost Sure [SMM Copper Morning Comment Dec 12]

LME copper opened at $9,180/mt overnight, initially dipped to $9,163.5/mt, and then fluctuated upward to a high of $9,234/mt during the session, before retreating to close at $9,177/mt, down 0.61%. Trading volume reached 20,000 lots, and open interest was 269,000 lots. The most-traded SHFE copper 2501 contract opened at 75,250 yuan/mt, fluctuated upward to a high of 75,550 yuan/mt initially, then fluctuated downward during the session, dipped to 75,240 yuan/mt near the close, and finally rebounded slightly to close at 75,410 yuan/mt, down 0.11%. Trading volume reached 21,000 lots, and open interest was 149,000 lots. Macro side, the US November unadjusted CPI YoY growth rate further rebounded, rising for the second consecutive month to 2.7%. The US November core consumer price index increased by 3.3% YoY and 0.3% MoM, all meeting expectations. Following the data release, the US dollar rose, with the US dollar index stabilizing above the 106 mark, putting pressure on copper prices. Fundamentally, supply side, with the last trading day of the SHFE copper 2412 contract approaching, suppliers are clearing inventory, leading to an increase in copper cathode spot supply. However, on the demand side, despite the rise in copper prices, downstream purchasing sentiment remains lukewarm, with opportunistic low-price buying prevailing, resulting in overall average transaction performance. Price-wise, the market has strengthened its expectation that the US Fed will cut interest rates by 25 basis points in December, which is almost "a sure thing." It is expected that today's copper prices will have limited downside space but will also be suppressed by the US dollar.