MM has been long the Global X Copper ETF in its Global Macro ETF Portfolio since October 2019, a position which is in line with our reflation outlook over the coming years. Interestingly JP Morgan have now decided the world has probably entered its 5th “commodity super-cycle” since the start of the 20th century, in other words the price of copper, iron ore etc will continue to rally strongly, as will the highly correlated $A – MM agrees but we feel the aggressive rally over the last 12-months by the likes of copper is close to a ~20% correction and printed rhetoric like this makes us even more confident that it’s approaching fairly fast.
The charts below show that global copper miners are only a few ticks away from 8-year highs whereas OZ Minerals (OZL) is almost 10% below its 2021 top with a strong $A the likely headwind to the Australian stocks, it’s not just CSL Ltd (CSL), Cochlear (COH) and some major IT names that face earnings headwinds when the $A advances against the greenback.
MM is bullish the COPX short-term looking for 10-20% further upside
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