Written Commentary
COPPER
The copper market is fortunate to be tracking higher this morning as Chinese inflation readings overnight suggest lingering economic malaise. However, a substantial expansion in the Chinese trade surplus has provided an offset to signs of lingering deflation at the manufacturing level. As a result, analysts suggest soft seasonal demand combined with a large jump in domestic production caused the reduction in imports. On the other hand, month over month Chinese copper imports increased by 1.5%. Earlier this week a Chinese government owned entity announced purchases of shares in the “big four” Chinese banks to shore up confidence in the wake of the travails at Country Garden real estate giant, but that news was not seen as a solution to Chinese real estate contagion fears.
GOLD / SILVER
While the US dollar is tracking lower early today it remains within proximity to yesterday’s spike recovery high and is therefore tempering bullish sentiment toward gold and silver early today. On the other hand, the CME Fed watch tool this week has reduced the probability of a rate hike next month to single-digit percentages which should continue to keep the dollar off balance and out-of-favor. However, treasury yields are tracking lower this morning following a disappointing 30-year US treasury auction yesterday and that has apparently captured the attention of gold, silver, and many physical commodities today. Apparently, economists see the Chinese trade data overnight as a sign that the Chinese economy might be moving away from an entrenched slowdown with the trade surplus expanding. While many global inflation readings overnight were disappointing, comments from the IMF meeting in Marrakesh indicate that while inflation remains elevated, it is now at manageable levels.
Interested in more futures markets? Explore our Market Dashboards here.
Risk Warning: Investments in Equities, Contracts for Difference (CFDs) in any instrument, Futures, Options, Derivatives and Foreign Exchange can fluctuate in value. Investors should therefore be aware that they may not realise the initial amount invested and may incur additional liabilities. These investments may be subject to above average financial risk of loss. Investors should consider their financial circumstances, investment experience and if it is appropriate to invest. If necessary, seek independent financial advice.
ADM Investor Services International Limited, registered in England No. 2547805, is authorised and regulated by the Financial Conduct Authority [FRN 148474] and is a member of the London Stock Exchange. Registered office: 3rd Floor, The Minster Building, 21 Mincing Lane, London EC3R 7AG.
A subsidiary of Archer Daniels Midland Company.
© 2021 ADM Investor Services International Limited.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM. The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.
