Copper futures are beginning their rebound today from three-week lows on the outlook that weak Chinese factory activity may prompt the national government to introduce new stimulus measures to turn things around. Copper futures ended Thursday up 225 points at $2.8515 per pound at New York’s Commodity Exchange.
Interestingly it was data released by a popular bank’s “purchasing manager’s” index that revealed China’s data only inched-up by two-tenths of a point (to “49.1”) which missed expectations for better growth and below the benchmark level of “50” which would indicate growth in activity rather than contraction. China is the world’s largest copper consumer and used nearly 40% of copper resources just last year.
“Let’s see if the Chinese national bankers continue to lower interest-rates for a fourth time to boost confidence and growth,” said Barb Levy, chief director for The Fox Group’s futures division in Chicago, regarding the fundamental assessment of the copper futures market. Levy added, “They have been active in doing this since last November and this is what copper (futures) traders are probably looking for.”
The trend for copper futures is up and there is no topping action yet in sight. I suspect the Chinese interest-rate cuts have helped prompt this market higher since its January lows.
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