Chile sees slowing Chinese demand for copper, projects price falling in 2022

Commission Chilena del Cobre (Cochilco) acts as an advisor to the Chilean government through the Ministry of mining, focused on copper and its by-products.

(That’s an ‘in a nutshell’ description.)
Cochilco average copper price forecast
  • for 2021 US$4.20/lb (was US$4.30/lb previously, this projection made 3 months ago)
  • for 2022 unchanged at US$3.95/lb
slower growth in the Chinese economy
and therefore copper import falls
China’s policy to sell copper reserves
US Federal reserve to taper stimulus
On the other hand:
  • expectations of economic recovery
  • low inventories
  • limited supply
  • labour disputes
Cochilco predicts a supply deficit for 2021 and a surplus for 2022
  • global copper demand will rise this year and next

The USD falls vs all the major currencies this week except one

USD falls the most vs the NZD

The USD fell versus all the major currencies is weeks with the exception of one…the CHF.
USD falls the most vs the NZD
The US dollar fell the most versus the NZD and AUD as those currencies benefited from risk on sentiment, somewhat improving China and expectations that as Covid spread slows, central banks would start to look toward reversing some of the expansionary policy.
After trading sideways on Monday, the NZDUSD rose on each successive day this week.  The pair has risen 9 of the last 11 trading days.
Versus the AUDUSD, the pair was modestly lower on Monday, before also rising on each successive day this week.
For the USDCHF, last Friday, the pair closed near the low for the week.  After trying to extend lower early in the session on Monday, the pair moved sharply higher. That moment it was reversed on Tuesday before rallying up to the weeks high on Wednesday and moderating lower on Thursday and again today. Overall, the week was full of up and down price action with only an 88 pip trading range.

Euro Stoxx index falls for the first time in 11 trading sessions

European indices move lower today

The major European indices have closed lower today.

  • The Euro Stoxx index fell for the first time in 11 trading sessions (10 higher closes).
  • The German Dax came off of a record levels.
  • The France’s CAC could not reach its all-time high from 2000
A look at the provisional closes shows:
  • German DAX, -0.5%
  • France’s CAC, -0.9%
  • UK’s FTSE 100, -1.0%
  • Spain’s Ibex, -0.83%
  • Italy’s FTSE MIB, -0.85%
The Euro Stoxx index fell -0.7%.
In other markets as London/European traders look to exit:
  • Spot gold plus $5.50 or 0.32% at $1784.85.
  • Spot silver is up for cents or 0.21% $23.75
  • WTI crude oil futures are down $0.35 or -0.49% at $67.60
  • bitcoin is trading down $773 at $46,248. The digital currency traded above $48,000 today
In the US stock market, the major indices are lower but off their lowest levels:
  • Dow is down -79 points or -0.22% at 35436
  • S&P index is down -16.29 points or -0.36% at 4451.53
  • NASDAQ is down 125 points -0.85% 14697.65
In the forex market, the CHF is now the strongest of the majors while the CAD remains the weakest. The USD is mixed with gains vs the CAD, AUD and NZD and declines vs the JPY and CHF. The greenback is near unchanged levels vs the EUR and GBP.

Eurostoxx futures +0.7% in early European trading

Some catch up play for Europe going into the open

  • German DAX futures +1.1%
  • UK FTSE futures +0.6%
  • Spanish IBEX futures +0.6%
After the more upbeat mood in US equities yesterday, European indices have some catching up to do following the Easter break since last Friday.
The early gains belie the more measured risk mood so far today though, with US futures pulling back slightly after yesterday’s stellar advance. S&P 500 futures and Dow futures are down 0.2% while Nasdaq futures are keeping flatter with Treasury yields a touch lower.
That is keeping the dollar steadier and major currencies little changed so far on the day.

Eurostoxx futures +0.7% in early European trading

A bit of catch-up play in early trades

  • German DAX futures +0.6%
  • UK FTSE futures +0.8%
  • Spanish IBEX futures +0.4%
European indices close the day near the lows yesterday, down by over 2% across the board, missing out on the late recovery in US equities towards the latter stages.
Hence, the gains here are largely due to some catch-up play and belies the more tepid and cautious risk mood to kick start the session.
US futures aren’t doing a whole lot, with S&P 500 and Nasdaq futures keeping at flat levels at the moment. Major currencies are also mostly little change besides some mild strength in the yen, with AUD/USD seen a little weaker under its 100-day moving average.

Snowflake now worth $70 billion

Not a bad day’s work

Snowflake’s $3.36 billion initial public offering was a record for a software company and the biggest in the US this year. The share price soared as much as over +150% yesterday. It is now worth more than Uber, Dell and General Motors. Definitely an upgrade from a ‘flake’ to more like a snow ball!
US IPO’s are having a hectic week with 21 companies expected to price their offerings and raising more than $10 billion together.

Reasons for the sliding oil price pile up

  • Crude oil prices collapsed, with Brent crude closing under USD40/bbl for the first time since June
  • risk-off tone across markets 
  • stronger USD headwinds
  • tone was set earlier this week after Saudi Aramco cut its prices to Asian refiners, suggesting demand is weak
  • Bloomberg survey showed that only four out of ten Asian refiners would be subsequently trying to buy more Saudi crude
  • Abu Dhabi National Oil Co also cut its prices on Tuesday
  • US refiners are also cutting output, as the summer driving season ends and inventories remain high
  • rising COVID-19 infections across the globe doesn’t bode well for demand in the short term
  • futures markets widening in the contango for both Brent and WTI to their widest levels since May

US stocks close on the lows. Nasdaq hits correction territory

Nasdaq takes a dive

A few attempts to bounce intraday fell flat and stocks finished near the lows of the day. The S&P 500 fell  while the Nasdaq’s 4% drop extended the decline since last Wednesday’s record high above 10% — an unofficial correction.
The Nasdaq is now just 1.0% away from wiping out the entire August-Sept gain. Tesla shares fell 21% on the day, its worst ever one-day loss.
Nasdaq takes a dive
  • S&P 500 -95 points to 3331
  • Nasdaq -465 to 10847
  • DJIA -632 to 27,500

Eurostoxx futures +0.5% in early European trading

Some mild optimism flowing in early trades

  • German DAX futures +0.6%
  • UK FTSE futures +0.4%
  • Spanish IBEX futures +0.4%
US futures have also moved higher in the past hour, with S&P 500 futures now up ~0.7% while Nasdaq futures have pared losses to flat levels now and that is feeding to some slight positive momentum to start European morning trade.
In the currencies space, the aussie is also ticking a little higher with AUD/USD now testing 0.7300 and the confluence of its key hourly moving averages @ 0.7294-13.
USD/CAD is also nudged lower from 1.3110 to 1.3090 and testing the confluence of its own key hourly moving averages @ 1.3086-91 currently.

US stocks tumble. Major indices have worst day since June (for S&P and Dow) and March (for Nasdaq)

Dow Jones falls -1025 points at its lows

The major indices are closing sharply lower. The major indices declines were the sharpest since June for the S&P and Dow.

For the NASDAQ, you have to go all the way back to March to have a worse trading day.

The Dow industrial average is now back negative in 2020. The declines snaps the S&P and NASDAQ 4 day winning streak. All 11 sectors of the S&P closed lower.
The final numbers are showing:
  • The S&P index fell 125.92 points or -3.52% at 3454.92. S&P index fell -4.28% at its lows
  • The NASDAQ index fell -598.34 points or -4.96% at 11,458.16. NASDAQ index fell -5.77% its lows
  • The Dow fell -808.50 points or -2.78% at 28292.33. Dow industrial average fell -3.52% at its lows
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