On Monday it was a familiar story out of China with weak economic data in the form of the Purchasing Managers Index readings. A reading below 50 implies contraction and no surprise it came in at 48.6. This caused LME prices to slightly fall but not enough to cause anyone to lose any sleep.
In the USA, the nation has started the Presidential vote process with votes being cast in Iowa as we write, with most of the attention on America’s version of Clive Palmer, self-declared Billionaire Donald Trump.
The AUD/USD is trading at 71.10
DJ Copper Closes Down On China, Oil Woes By Ese Erheriene LONDON–Copper prices closed higher in London on Monday, following weak manufacturing data from top consumer China and sliding oil prices.
The London Metal Exchange’s three-month copper contract was down 0.02% at $4,560 a metric ton at the PM kerb close, fighting to stay above the crucial psychological level at $4,500 a ton.
Official Chinese data showed manufacturing PMI fell to 49.4 in January, its lowest level since August 2012. Caixin PMI data edged up to 48.4 in January, but was still below the official PMI. Both were below 50, the mark indicating economic expansion, for the sixth and eleventh consecutive month respectively.
Additionally, oil prices were lower for most of the day as traders lose hope that the world’s big producers will cut their output and that Asia’s economies can help drive demand. Many traders buy commodities as part of a diversified basket that includes crude oil and copper. This means that a large drop in oil prices can trigger declines in other commodities as traders sell the entire basket.
“Disappointing manufacturing data in both China and the U.S., together with a slide in crude oil prices put further pressure on the markets,” wrote Liz Grant at Sucden Financial.
Among the other base metals, aluminum closed up 0.2% at $1,521 a ton, zinc was up 1.5% at $1,648 a ton, nickel was down 2.3% at $8,640 a ton, lead was up 0.8% at $1,732 a ton and tin was down 0.4% at $14,800 a ton.