After reaching a low of 4.1305 in the late New York session, copper futures on the COMEX have seen a more robust purchasing response. After a period of responsive purchasing in which market participants viewed the asset as a value wager, the asset is presently trading sideways. Copper prices will rise to $4,2300 as a result of the inventory dispersion in the range-bound motion.
A large rise in copper prices is supported by an improvement in market mood and the publication of encouraging economic data from China.
Investors are expecting the release of the Federal Reserve’s (Fed) interest rate decision, which is predicted to remain exceptionally hawkish since skyrocketing inflation can only be managed by severely restrictive measures. The likelihood of a 75 basis point (bps) rate rise are bolstered by last week’s stronger inflation data. In anticipation of a higher interest rate announcement, the US dollar index (DXY) has strengthened during recent trading sessions. The DXY indicated some weariness indications at the outset, but has since regained the majority of its losses as Fed policy uncertainty looms once more.
Copper bulls have been encouraged by China’s positive economic indicators despite the two-month period of severe lockdown in Shanghai and Beijing. The National Bureau of Statistics of China announced annual Retail Sales of -6.7%, significantly higher than the forecast of -7.1% and the previous reading of -11.1%. While Industrial Production has turned positive, it has settled at 0.7%, substantially better than the consensus estimate of -0.7% and the previous result of -2.9%.