Copper ticks higher as Fed rate hike bets fade
CPER•Copper rose 0.6% to $14,346 a metric ton as fading expectations for an October U.S. rate hike outweighed pressure from a strong dollar. Traders priced in an 18% chance of a hike, down from 71% a week earlier.
1. Copper gains
Benchmark three-month copper on the London Metal Exchange rose for a second straight session, gaining 0.6% to $14,346 a metric ton. It reached a record $14,875 on September 10 before losing ground last week.
2. Rate expectations shift
Copper was supported by higher equity markets as the likelihood of an October Federal Reserve rate hike faded after weaker-than-expected U.S. jobs data. Rate traders priced in an 18% chance of a hike at this month’s meeting, down from 71% a week earlier.
3. China demand in focus
The market awaited China’s return on Thursday to gauge fourth-quarter buying interest. Chinese copper stocks were thin and smelter maintenance suspensions were lined up, while domestic demand appeared weak. The LME cash contract traded at a nearly $63-per-ton premium over the three-month forward contract, up from $53.50 on Friday.
