Three month LME copper prices recovered some of the week’s precipitous declines today as prices breached the 100 day MA and rose towards $6,873/tonne early on in the day. However, bulls struggled to hold onto these higher levels and prices slipped back below $6,850/tonne towards the end of the day. Concerns regarding Chinese demand, after figures released earlier this week showed money flows into China slowed significantly in July, have seen the red metal shed almost 5% since the start of the month. The latest import statistics showed a marked slowdown in Chinese imports of copper cathodes in July as they fell 8% m/m, lower by 10,000 tonnes. Commitment of traders as released by the LME has seen a shift in sentiment with the latest report on the 8th of August showing an increase in short positions as broker dealers and index traders position themselves to take advantage of further potential downside.
Global equity benchmarks remained on track to post solid gains today, with European indices set to close higher on the week while US benchmark indices attempt to post gains for the second straight week. With geopolitical tensions between Russia and the West taking a back seat on Friday investors paid closer attention to macro data released throughout the day.
After a less than impressive start to proceedings with the Empire manufacturing index failing to meet expectations of a 20.0 reading in August, coming in at 14.69, the release of PPI for July came in as expected, with final demand prices increasing 0.1% in July, reassured investors. Next to follow was July industrial production growth, which slightly exceeded expectations of 0.3% m/m in July, increasing 0.4% m/m. Rounding up the day’s releases was the University of Michigan confidence index which posted a surprise drop from 81.8 the previous month to 79.2 in August. Despite the mixed bag of economic data, investor appetite for risk held firm throughout the day.