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China Exports Fall Again

Copper prices are coming under fresh pressure today on the back of weaker-than-forecast data out of China overnight. Total exports were seen contracting deeper than expected last month, reflecting an overall dip in output. With recent manufacturing sector data reflecting this weakness, traders are once again concerned about the health of the Chinese economy. The recent default of Country Garden, one of China’s biggest property developers has unsettled traders recently with weak economic data adding to bearish sentiment around China, keeping key commodities like copper pressured as a result.
 

Hawkish Fed Risks

A fresh uptick in the US Dollar today is also putting pressure on copper prices. Fed’s Kashkari last night stoked Fed tightening expectations once again, warning that the Fed still had further work to do to bring inflation back to target. Looking ahead, Kashkari said it was important to see more data before deciding what the Fed should do next. Rate hike bets had fallen back after Friday’s round of weaker-than-forecast jobs data. However, Kashkari’s comments show that further tightening is still very much a risk, and incoming data this month will be closely watched ahead of the December FOMC.
 

Technical Views

Copper

The recent rally in copper has seen the market breaking above the 3.675 level. However, the move has stalled for now ahead of the underside of the broken bull trend line with price now trading down to test 3.6745 from above. This is a key pivot for the market and a break back below here will turn focus to the 3.5475 level next. 

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