Dollar weakness and stimulus hopes have pushed copper prices higher. LME Copper 3M contract is trading above $8,100 per mt, however absence of Chinese market for the lunar year holiday from Feb. 11-17, is likely to keep physical market players away.
Hopes increased for Stimulus in the US, after Treasury Secretary, Janet Yellen, said that the U.S. could return to full employment in 2022, if President Joe Biden’s $1.9 trillion coronavirus rescue package is passed.
On the economic data front, Japan’s January economy watchers outlook survey unexpectedly rose +3.8, to 39.9, stronger than expectations of a decline to 35.0.
Conversely, the Eurozone February Sentix investor confidence index unexpectedly fell -1.5 to -0.2, weaker than expectations of +0.7, to 2.0. Also, German December industrial production was unchanged m/m, weaker than expectations of +0.3% m/m.
Comments on Monday from ECB President, Lagarde, boosted confidence in the economic outlook and metals demand, when she said that the Eurozone recovery "has been delayed, but not derailed"
LME Copper inventory has dropped by 96,950 mt in the last one year, and now stands at 74,575 mt, as on Feb. 8, 2021. Meanwhile, SHFE Copper inventory has dropped by 59,281 mt in the last one year, and now stands at 33,616 mt, as on 8th February, 2021.
Copper prices are trading firm, on the back of US stimulus hopes, however copper is facing stiff resistance around $8,120-$8,223 levels, in the backdrop of low physical demand in China. It may find immediate support around the 50-days EMA at $7,765 per mt, & the 100-days EMA at $7,414 per mt.