Copper Rises Despite China’s Deflation

  • Copper
    (${instrument.percentChange}%)

Copper Analysis

Copper started the week on the back foot, amidst risk-off sentiment, partly fueled by China's further exports and imports decline. The stream of poor Chinese data continued today, as consumer inflation fell below zero in July and producer prices remained in deflation territory. The string of poor data over the past few months, points to weak Chinese recovery, one the world's top consumers of copper with its important real estate market.

However, authorities have already extended policies to support the property sector [1] and have pledged to prop the economy, while today's data seem to create hopes for further stimulus. As such, Copper rises today, despite the poor inflation report.

This keeps the August highs in play, but fresh catalyst will be required for further gains and we are cautious at this stage around the ascending prospects. Copper is in tough spot while below the EMA200 and exposed to the ascending trendline form the 2022 lows, although sustained sub-3.543 weakness has a higher degree of difficulty.

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Nikos Tzabouras

Senior Financial Editorial Writer

Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.

With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.

References

1

Retrieved 15 Jun 2024 https://english.www.gov.cn/news/202307/11/content_WS64aca4ffc6d0868f4e8ddac0.html

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