Markets have been on a steady decline throughout the week while the Australian dollar has gained against the USD, currently trading above 0.92.
Internationally, whilst traders are reasonably comfortable to quote prices, when markets are a little subdue, quoted prices tend to be well on the conservative side with no room for upside negotiation. In a declining market, many traders and manufacturers like to consolidate stock and are happy to let it run down a little as they hope to take advantage of slightly lower prices in coming weeks.
**** LME Metals Struggle For Traction, Falls Seen ****
By Laura Clarke @ dowjones.com
1343 GMT [Dow Jones] Base metals are mixed in summer-thinned trade. “Given we are in the midst of the summer lull, we are not be surprised the markets are struggling to attract follow through buying–We have be wary of getting comfortable with the rallies for some time now,” says Will Adams, head of research at FastMarkets. He notes further weakness could be expected as government in key consumer China tightens its control on many aspects of the economy. “How the market handles this pull back should give us an update on underlying sentiment, it may be we need to get outright bearish again [to] bring about further production cutbacks where they are needed.”
**** Base Metals Mixed In Tight, Subdued Trading ****
By Arpan Mukherjee @ wsj.com
0609 GMT [Dow Jones] Base metals are mixed in tight ranges in Asia with trading remaining subdued and cautious ahead of China’s official manufacturing data and Federal Open Market Committee meeting this week. “While we don’t expect major changes to the FOMC policy statement, investors should expect volatility given the many factors in play,” Kelly Teoh, a strategist at IG says in a report. Analysts note that though copper stockpiles have declined in July, soft economic outlook is likely to weigh on prices.
Analysts say Chinese decision to shut down some copper production as the government restructures the economy, is also weighing on the economy. “We think copper prices could be at risk of a further sell-off this Thursday as China’s official PMI data is announced, offsetting signs of good demand in China,” ANZ says in a report.