Copper fell today as attractiveness of industrial metals declined on negative macroeconomic data from Europe and the United States. The bad fundamentals erased yesterday’s positive mood and drove most commodities down.
The eurozone manufacturing Purchasing Managers’ Index slipped from 47.7 in March to 45.9 in April, the lowest level in 34 months. German unemployment increased by 19,000 jobs. That was an unpleasant surprise as analysts predicted a small decrease.
While traders get used to bad news from Europe, the USA usually was a source of optimism. It was not so today. Factory orders declined by 1.5 percent. Employment rose by 119,000 — not a bad figure if one forgets that forecasters promised an increase by 178,000.
All in all, today was a bad day for commodities. Nonfarm payrolls will on be released on Friday and should have a great impact on markets, confirming today’s employment report or proving it wrong. An interesting thing is that poor employment may be not a totally bad for riskier assets. The Federal Reserve may consider a next round of easing if the employment situation will become bad enough. Quantitative easing means a weaker dollar and higher prices for commodities as a result.
Copper price was down from $3.8300 to $3.7855 per pound as of 18:37 GMT on COMEX today, while daily low was $3.7655.
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