The copper market has regained its footing after a bit of a corrective trade on Monday. The press is tossing around talk of a possible short squeeze, and given the rather large net spec short positioning in futures from the last COT report, it isn't surprising to see minor gains on what would appears to be technical stop loss buying. Seeing the Chinese cut their RRR again is certainly a large portion of the added strength today. However, it is also clear that many markets, like copper, are also anticipating near term easing action from the ECB as early as this Thursday. Some estimates call for some minor gains in US scheduled data later this morning and the reaction in copper prices to the data will be very telling. For instance, one might expect copper prices to see a little back and fill on the charts in the wake of minor gains in US data becuase that might lead to reduced odds of fresh easing from the US Fed. While there were reports of Chinese copper plant protests overnight, the supply side issues from China aren't likely to become a primary market force in the near term. LME copper stocks overnight were down 1,125 tons to stand at 255,175 tons.
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