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Futures Market News
Copper futures end week on the rise
Dec 16, 2011 01:25 PM
Friday saw copper futures climb out of a four-day hole as the industrial metal capitalized on healthy economic news from the U.S., according to Reuters.
The nation hosting the globe's biggest economy showed it is alive and well. Copper's price typically reacts to industrial and manufacturing news.
But demand for the reddish metal from nations hosting emerging markets waned due to damages caused by the voracious, relentless appetite of the sovereign debt crisis.
At one point on Friday, copper futures climbed 1.5 percent, which drew down this week's losses to 6.3 percent. Despite Friday's performance, the price of copper futures continues driving toward the largest loss in one week since late September.
So too is the industrial metal driving toward its first annual losses since 2008. On Shanghai markets, copper futures are down 26 percent thus far on the year.
"The U.S. is doing all right and that's helped markets," chief investment officer Ang Kok Heng with Phillip Capital Management Sdn in Kuala Lumpur told Reuters. "But Europe remains a major concern while growth in other parts of the world such as China is also slowing."
The sovereign debt crisis also has pulled down the value of zinc and aluminum since economic growth is suffering, according to Reuters. Lending from banks for purposes including the trade of commodities also is a casualty of the debt scourge as is reduced demand for emerging nations' exports.
But Dow Jones Newswires reports good news regarding the sovereign debt crisis helped the industrial metal's strong performance on Friday.
Lawmakers in Italy, one of the core nations suffering from the sovereign debt scourge, approved austerity measures. Germany, host of the top economic system in the euro zone, will not see ballots cast on a referendum that proposes adjustments to the permanent rescue fund of the debt-hobbled euro zone.
Germany speaks from a bully pulpit on issues of the euro due to its economic might. Chancellor Angela Merkel closely convenes with French President Nicolas Sarkozy, leader of the nation hosting the euro zone's second-largest economic system.
Italy and Spain are two nations on the cusp of showing damages from the sovereign debt crisis' run through the banks, public finance systems and markets. Greece, Ireland and Portugal already have solicited and received tranches of international aid while Italy and Spain have often waivered very closely toward the threshold of requesting aid.
Together the nations known as the PIIGS represent the countries most victimized by the dilemma that simply will not quit.
But the iota of good news drove up the value of the euro when compared with the world's reserve currency. That, in turn, also benefited copper futures for buyers seeking bargains.
"We suspect that the relative stability in the European debt markets and the euro is leading to some modest buying setting in," metals analyst Edward Meir with brokerage INTL FCStone told Dow Jones Newswires.
Also benefitting from the upward tick of the reddish metal is the Chilean peso, according to Bloomberg. The monetary unit of the South American nation is riding two consecutive days of gains. More than half of what Chile exports is copper.
One trading head pointed directly at data from the U.S. as being the cause of commodities' climb in value on Friday.
"Markets are positive basically because of yesterday's data and the employment numbers especially," spot currency trading head Ronald Volpi with EuroAmerica Corredores de Bolsa told Bloomberg. "Commodities are up, and that means the dollar is down. There is still dollar buying though."
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