Copper Price Outlook: Support Holds as USD Drop Offsets Chinese PMI Miss

CopperPrice Analysis and Talking Points:

• Copper Prices Initially Pressured After Chinese PMI Miss
• Copper Dip Pared on Drop in Stocks and Softer USD

COPPER PRICES INITIALLY PRESSURED AFTER CHINESE PMI MISS

Overnight, Chinese data disappointed market expectations with the manufacturing PMI posting a surprise drop to 50.1, from 50.5 in March, which had been below the market consensus of 50.7. This had also coincided with the softer Caixin manufacturing PMI, as such, copper prices had come under pressure amid concerns that China’s stimulus efforts are having a limited impact. However, while the reading had been weaker than expected, Chinese PMI remains in expansionary territory.

COPPER DIP PARED ON DROP IN STOCKS AND SOFTER USD

With the USD on the defensive, this has seen flows filter into the commodity space with the base metal tracking higher and holding above $6400. Alongside this, LME warehouse movements (released 9am London time) showed a decline in copper stockpiles (-3050), thus providing an added boost to copper.

COPPER PRICE CHART: Daily Time-Frame (Nov 2018-April 2019)

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