What are major factors analysts believe to affect LME copper prices during the week-long Chinese holiday?
History shows LME copper generally performed well in the holiday periods for the past seven years, except for 2008 and 2013. The red metal tumbled in early October in 2008 due to the global financial turmoil and slumped for the same period last year due to the Federal government shutdown.
As for the remaining five years, the gains in LME copper were mostly driven by a weaker US dollar and strong economic data, particularly manufacturing and hiring figures, which were the main causes behind both a 12.64% plunge in 2008’s holiday and the over 4% climb in 2011.
Besides, analysts noted that copper prices in China usually tracked the LME copper price trends during the holiday after the SHFE restarted.
This year, the US dollar index has jumped above 85 to an over four-year high, and the US economy is still recovering steadily, compared with China’s slowdown and continued gloominess in Europe.
The US CPI, September manufacturing PMI and non-farm payrolls are slated for release during China’s early-October break. These economic performance indicators will impact movements of the dollar, in turn, exerting influence on LME copper prices.
In addition, the European Central Bank (ECB) will decide whether to roll out further accommodative measures at its policy meeting scheduled for October 2, which is also expected to affect LME copper prices.