26/07/2024 09:20

Copper Futures ($US)

Industrial metal Copper (Cu) was the top commodity pick for most analysts at the start of 2024, including ours. Cu enjoyed phenomenal gains in the first half of 2024 before plunging over 20% as China's economy slowed, leading to growing inventories, and EV sales continued to disappoint. We remain bullish despite current weakness, but the market has fallen further than MM expected.

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18/03/2024 09:03

First Up

Copper was the shining light in an otherwise tough week for local stocks, with the industrial metal surging almost 6%, testing 12-month highs in the process. Ironically, the advance coincided with iron ore making fresh 7-month lows, with the divergence between two of Australia’s most important exports certainly garnering plenty of attention. Iron ore has slipped over 30% since early January as Beijing fails to lift hopes around the health of their construction industry, leading to loss-making steel mills buying less ore and creating stockpiles at Chinese ports.

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23/01/2024 09:41

Does the plight of Nickel send warning signs to Copper?

The collapsing nickel price bears a painful resemblance to lithium, both of which are used in EV batteries. However, the surging increase in demand that was anticipated to propel the sector higher has arrived with a relative whimper, while supply has increased unabated from Indonesia in anticipation, with the result being a glut & depressed prices.

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12/04/2023 09:14

Global Markets

The US market started its post-Easter trading in a quiet fashion ahead of tonight’s important US CPI inflation which will have a huge impact on the Feds future path for interest rates. The consensus is for CPI Inflation MoM to be +0.2% for March & 5.1% YoY which is a big drop from 6.0% at last month’s print and would be the 9th consecutive month of declines since inflation hit 9.1% in June 2021. i.e. this is clearly trending in the right direction.

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27/03/2023 09:18

Commodities

Surprisingly, even after the recent rally sent gold back toward its all-time high the speculative position in gold remains relatively low, which in our opinion underpins the bullish breakout potential for gold. Precious metals might need to consolidate as the banking crisis hopefully slowly abates but as the hiking cycle comes to its conclusion we believe it’s just a matter of time before gold breaks above $US2,100/Oz.

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13/03/2023 09:18

Commodities

Gold bounced strongly last week as its safe haven status came to the fore plus the $US retreated as bond yields fell under the SVB influence. How things play out with Silicon Valley Bank is largely guesswork but we are encouraged by the noises from Janet Yellen et al, and we see stability returning sooner rather than later.

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08/03/2023 09:32

Global Markets

Every time US stocks adjust to higher bond yields Jerome Powell reminds the market that rates can go even higher than many think, his testimony overnight sent the US 2 years above 5% and 10 years up towards 4%. Overall the news from the Fed wasn’t surprising just a reality check i.e. a simple reminder that the outlook of “higher for longer” should be taken seriously by markets.

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24/02/2023 09:48

Global Markets

US stocks experienced another choppy session overnight as traders weighed up the prospects for an economic soft-landing as the Fed becomes increasingly hawkish. Retail investors are one group who have taken a bearish view with the bull-bear spread at its most pessimistic stance since the start of 2023.

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30/01/2023 09:37

Commodities

MM still believes that commodities look great through 2023/24 however as the $US starts to base around the 101 area following its 11.6% pullback over the last 4 months we can see some consolidation and potential short-term weakness in certain areas. Copper did just this last week even as China continued to re-open its economy suggesting much of this positive news courtesy of Xi Jinping et all is already built into the industrial metal after its +10.8% rally this month.

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18/01/2023 09:38

Global X Copper Miners ETF (COPX US) $US40.11

This ETF holds the likes of KGHM Polska Miedz SA, Antofagasta, Freeport-McMoRan and BHP Group which contains a great basket of companies to represent MM’s medium term view towards commodities hence while it would be easy to grab our profits and run this is one position we can see ourselves holding over a few years as opposed to weeks/months.

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