Copper: Weak Manufacturing Data Weighs on Red Metal
Copper prices were initially soft again this week as markets fluctuated ahead of two major risk events: the ECB June meeting and the UK elections. Following the China credit downgrade by Moody’s a weak reading on the Chinese Caixin PMI kept metals pressured. Data weakness was also seen in the Eurozone with German manufacturing data disappointed, adding further downward pressure.
However, prices were able to rebound on Thursday follow President Trump’s initial unveiling of his infrastructure spending plan, which he urged Democrats to work alongside him on. Trump plans to leverage the $200 billion dollars in his budget proposal into $1 trillion worth of projects to help “rebuild our nation’s infrastructure”.
It was the announcement of such a plan, ahead of Trump’s election that saw metals markets explode higher last year as investors and speculators positioned for huge demand linked to the President’s plans. However, momentum was soon lost when it became clear that the plan was to take a backseat as the President pursued other policies on his agenda.
The same key levels continue to frame the copper market as the year to date range persists. To the topside, the key area is the retest of the bearish trend line from 2011 highs alongside the 2015 high at 2.963. To the downside, initial support comes in at the December low of 2.452 while deeper support can be found at the mid-2016 highs around 2.294.
Read more: https://www.orbex.com/blog/2017/06/weekly-commodities-wrap-trump-unveils-infrastructure-spending-plan/