Overnight the copper market was lifted by renewed hopes of Chinese easing over the coming weekend. With signs of improvement in the US housing sector yesterday and escalating hopes of action from China directly ahead, it is not surprising to see September copper prices poised to breakout to the upside. In fact, the copper market also seems to be facing a generally improved overall macro economic environment, with global equity markets positive, supportive currency market action and even some indirect support from rising grain and energy prices.
With the Chinese earlier in the week posting a rise in Home prices (after a very long series of monthly declines) there are multiple signs that global housing conditions might have bottomed. With the copper market over the last two weeks, seeing stronger than expected US auto sales data, there would seem to be some justification for short covering buying, especially with copper maintaining a net spec short positioning in its recent COT data. LME copper stocks overnight declined by 1,025 tons to stand at 252,550 tons.
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