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Germanys DAX30 index closed down 397.68 points, or 1.68%, at 23,336.07 points on Tuesday, September 16; Britains FTSE 100 index closed down 86.48 points, or 0.93%, at 9,190.55 points on Tuesday, September 16; Frances CAC40 index closed down 78.71 points, or 1.00%, at 7,818.22 points on Tuesday, September 16; Europes The STOXX 50 index closed at 5,373.25 points on Tuesday, September 16, down 67.15 points, or 1.23%; the Spanish IBEX 35 index closed at 15,158.19 points on Tuesday, September 16, down 230.31 points, or 1.50%; and the Italian FTSE MIB index closed at 42,513.00 points on Tuesday, September 16, down 540.72 points, or 1.26%.EU High Representative for Foreign Affairs and Security Policy Kallas: Israels ground military operation in Gaza will worsen an already desperate situation. This will mean more death, destruction and displacement.The Atlanta Feds GDPNow model expects U.S. GDP growth to be 3.4% in the third quarter, compared with the previous forecast of 3.1%.On September 16th, Nick Timiraos, the "Federal Reserves voice," wrote in his latest article: "With a Fed rate cut virtually certain this week, investors will be focused on whether Powell will further his recent shift in stance. Investors will be closely watching for a key piece of information: Will Powell and his colleagues set a total of three rate cuts this year, or stick with their June forecast (when a minority of officials expected two cuts, given the seemingly more robust job market)?" Last month, in a highly anticipated speech, Powells concern about the job market outweighed the concerns of some of his colleagues about inflation. The question now is: Will Powell further intensify this concern after the weak August non-farm payroll report? Doing so would confirm market expectations of further rate cuts in the coming meetings, but would also likely require overcoming the concerns of some colleagues who are hesitant to commit to such a rapid policy shift due to concerns about the neutral interest rate level and whether it should be brought there.According to the Financial Times: Britain has abandoned its plan to impose zero tariffs on steel exports to the United States.

Copper price snaps four-day rally despite China's increased metal imports in August

Alina Haynes

Sep 07, 2022 16:38

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Intraday, the price of copper falls almost 1.5%, representing the greatest day decline of the week as of early Wednesday morning in Europe. In doing so, the red metal breaks the previous three-day recovery from the six-week low.

 

Reuters reported that three-month copper prices on the London Metal Exchange (LME) completed the month of August at $7,801.50 per tonne, up 8.5% from a 20-month low reached on July 15 but still down 19.7% from the beginning of the year.

 

Fears of economic slowdown in the world's largest client, China, as well as the rest of the world, receive considerable attention as the causes are investigated. Increasing market wagers over the Fed's assertiveness are also placing a downward impact on metal prices. In contrast, an increase in China's copper imports should have supported metal prices, but it did not.

 

"According to customs statistics released on Wednesday, China imported 26% more copper in August than a year earlier, as lower prices and stockpiles prompted by power rationing increased demand for foreign supply," said Reuters. In August, China imported a total of 498,188.60 tonnes of unwrought copper and copper products, which included anode, refined, alloy, and semi-finished copper products. Compared to the previous year's amount of 394,017.10 tonnes, this is a two-year low.

 

It should be emphasized that copper buyers are not pleased with the drop in warehouse supplies. Reuters reported that Shanghai Futures Exchange copper warehouse stocks fell to a seven-month low of 31,205 tonnes on August 19.

 

On a separate page, US Treasury rates surge to a new multi-day high, propelling the US Dollar Index (DXY) closer reclaiming the two-decade high. This combines with hawkish Fed forecasts to impact on market sentiment and push the USD/JPY to its highest level in 24 years and the USD/CNH near the critical 7,000 milestone.

 

The US ISM Services PMI increased to 56.9, compared to the market's forecast of 55.1 and the prior reading of 56.7. However, the S&P Global Composite PMI and Services PMI decreased to 44.6 and 43.7, respectively, from early projections of 45.0 and 44.1, respectively. Despite this, the US Dollar Index (DXY) increased upon the announcement and reestablished a 20-year high. The CME's FedWatch Tool indicates a 72.0% chance of a 50 basis point (bps) Fed rate hike in September, up from 57.0% one day ago.

 

Consequently, commodities continue to decline, while US stock futures and Asia-Pacific stocks report losses at the latest.

 

The monthly releases of the US trade balance and Fed Beige Book reports could provide commodity traders with entertainment. However, the next two days will be dominated by the numerous Fed speakers, including Fed Chairman Jerome Powell, who are slated to make public appearances.

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