China, Fed Stimulus Aids to Boost Copper Futures

Copper futures are up for a second-day as the industrial metal works its way higher from the June lows with higher highs, and higher lows.  Its the biggest two day rally for copper prices in almost three months once it was known the Federal Reserve will maintain bond purchases, and China’s manufacturing sector is expanding.

China’s “purchasing managers index” (a measure of contraction & growth) is said to have beat the estimate by one-half percent, and the Fed stating it will maintain its stance of promoting domestic growth by buying debt, are both reportedly contributors for copper futures rallying.  Whether it is short covering of bearish positions, or fresh buying on a demand outlook, copper prices are rebounding from being down 15 this year.
           
Barb Levy, chief director for Futures & Options Xecution’s futures division in Chicago, had this to say regarding the current copper futures situation, Copper futures rose in today’s trading in reaction to the higher than expected Purchasing Managers Index out of China overnight.”  Levy adds, “A strengthening economy in China would support copper (prices) as they are the world largest consumer of the metal.”

Copper futures head-and-shoulders formation, and a series of higher highs and higher lows, have helped the industrial metal out of its downtrend in my work – but barely.  I still will prefer to see how copper price-structure will unfold before committing to a direction.

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