The weak PMI manufacturing of China began the sale activity in the copper, but the activity of sale of the CTA in the liquidity vacuum has exacerbated the fall, with the algos on the way to sell more than -7% of its maximum size, says Daniel Ghali, senior strata of TDS raw materials.
Systematic sellers can accelerate copper falls
“Since China has been the most acute source of purchase activity lately, the liquidity vacuum resulting from the next festivities presents a significant risk for prices, since the CTAs are ready to liquidate their copper in most scenarios for prices in the next sessions.”
“Prices now need to recover just to avoid subsequent liquidations. Even a flat tape will force the CTA to abandon their remaining lengths, which, given the liquidity vacuum, can result in a notable fall in prices. In addition, a great Downtape could lead to massive acquisitions of shorts that could total a colossal -45% of the maximum size of the CTA in this scenario.”
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.
