A meeting of senior Chinese party officials amid the Third Plenum has prevented base metals from weakening further as traders await signs of additional stimulus to turn the tide, notes Daniel Ghali, senior commodity strategist at TD Securities.
The Third Plenum will provide information on structural reforms
“The Third Plenum promises to offer additional information on structural reforms. Traders will be on the lookout for information on China’s plan to address the downward spiral in the property sector, along with plans for local government finance, ‘new quality productive forces’ including metal-intensive new energy industries.”
“For the moment, our real-time gauge of global commodity demand continues to plummet, pointing to a hangover from hoarding associated with pressure on Comex copper in an otherwise deteriorating local demand environment.”
“Commodity Trading Advisors (CTAs) could still add modestly to their length in Copper markets. Our simulations suggest that algorithms will likely buy back some length in almost all scenarios over the next week. Aluminum markets appear particularly vulnerable to additional algorithm liquidations.”
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
