Copper hits two-week high; China in focus

Copper hits two-week high; China in focus

10 June 2015, 14:07
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On Wednesday copper prices hit fresh two-week highs ahead of new data from China which will be released later in the week.

On the Comex, July copper hit an intraday peak of $2.765 a pound, the most since May 29, before declining to $2.754.

On Tuesday copper rose 1.7 cents, or 0.65%, to finish at $2.714 amid speculation China's authorities may introduce further stimulus measures to shore up the economy amid dim performance.

Market players now awaited a series of Chinese economic data due on Thursday for further signs on the strength of the economy and the future path of monetary policy.

Data on industrial production, retail sales and fixed-asset investment for May will be released.

Earlier, China's central bank lowered its inflation forecast for 2015, while predicting a pick up in the world's second-biggest economy during the next six months thanks to more stable home prices and firmer foreign demand, says Reuters.

Economists at the central bank posted on its website that they forecast annual inflation of just 1.4 percent in 2015, lowering their estimate from 2.2 percent earlier.

They specified that easier monetary policy conditions as a result of China cutting interest rates three times since November were expected to support growth in coming months.

Kevin Lai, an economist at Daiwa in Hong Kong, said to Reuters that he finds PBOC economists too optimistic as they say about recovery within the next six month. He noted that deflationary pressure will be stronger.

He also said that falling producer prices and weakening consumer inflation will lift borrowing costs in real terms, further squeezing companies already buffeted by weak orders.

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