Copper Hits New Record High, Here’s Why
Copper prices hit a new
record high today after Chinese Industrial Production reached the highest level
recorded. Output in China rose to $71.7 Bln in June, up 16% from the
previous year, China is the world’s largest consumer of copper. September Copper +1.88%
was boosted by the news that showed no signs demand was declining.
US treasuries declined following the release of
the NY Empire State Index. The index showed manufacturing in the region grew at
the second-fastest rate this year and was another sign the Federal Reserve will
be forced to continue raising interest rates. September 10yr T-Note
-0.20%, 5yr T-Note -0.15% and 2yr T-Note -0.04% closed lower.
The US dollar rallied vs. the euro after the
Treasury Department released International Capital data that showed foreign
investors bought $71.2 Bln (net) of treasury notes, corporate bonds and other
securities in June, compared to $55.8 Bln in May. The figure exceeds the most
recent trade deficit figure of $-58.8 Bln. A record $52.2 Bln poured into
corporate bonds.
Energy prices declined from Friday’s record
levels. October Crude Oil -0.40% and Natural Gas -0.40%
experienced modest declines, while October Heating Oil -1.71% and
Harbor Unleaded -1.99% fell more sharply.
The biggest percentage movers were all in the
softs. December Coffee -8.15%, Cotton -2.18% and October Sugar
-1.22% led the way down. The grains also experienced heavy selling with all the
major contracts declining. November Soybeans -4.29% and Soybean Meal
-5.53% were hardest hit. December Corn -2.72% and Wheat -1.05%
closed lower.
February Pork Bellies +2.40% closed limit
up for the second consecutive day.
Economic News
New York Empire State Index:
General Business Conditions, Level – Actual 23.0 Consensus 20.0
Treasury International Capital: (For the
full report click here)
Net foreign purchases of long-term domestic securities were $79.1 billion, $17.2
billion of which were net purchases by foreign official institutions and $61.9
billion of which were net purchases by private foreign investors. U.S. residents
purchased a net $7.9 billion in foreign securities.
Ashton Dorkins