Shanghai Futures Exchange copper fell 0.6 percent to 34,610 yuan ($5,393) a tonne on Friday with markets bracing for higher US interest rates that will increase business costs and undercut demand. In other metals, ShFE nickel fell 1.5 percent after it attracted fresh short selling, given huge stockpiles and persistently weak stainless steel demand.
"People are still looking in anticipation for Fed lift-off," said analyst Lachlan Shaw of UBS in Melbourne. "Secondly, demand is weak. The signals coming out of China suggest that you're not getting a pickup in infrastructure spend and a lot of people have been looking for that." An avalanche of data from China in coming weeks is likely to show economic performance in the world's second-largest economy remains sluggish, reinforcing expectations that Beijing will release more stimulus measures in months ahead.
A December US rate hike is widely expected, barring any shocks in Friday's US nonfarm payrolls report. "Today is payrolls day, and it would normally be quiet until the release, but with the fallout from the ECB decision still present and with commodities bouncing and the Opec meeting tonight, the session could be volatile," said ANZ in a note.
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