Copper Falls for 2nd Day
Copper futures fell for the second session on Thursday, trading below $4.6 per pound, after China said it will strengthen its management of commodity supply and demand to curb any “unreasonable” increases in prices. On the supply side, miner Glencore will restart operations at the currently idled Mutanda copper mine in the Democratic Republic of Congo in 2022 while in top producer Chile a possible strike at the world’s largest Chile’s Escondida mine threatens output. In spite of the price adjustment from a record high of $4.9 per pound reached on May 11th the copper cost is set to remain elevated given how crucial the metal is in the transition to a carbon-free world and as supply is constrained due to lack of investment by large miners. Meantime, the world’s top producer Chile passed a measure that would introduce progressive taxes on copper sales starting in 2024 and with the highest bracket set at 75%, pending the approval by the senate and the government.
European Shares Recover in Afternoon Trading
European stocks rebounded Thursday afternoon, with tech shares leading the gains following reports that Europe’s No 2 chipmaker STMicroelectronics is mulling an offer to buy its rival Nordic Semiconductor. In other corporate news, Deutsche Telekom raised its medium-term core profit outlook; while French conglomerate Bouygues revised up the full-year guidance for its telecoms division and reported a smaller than expected first-quarter core loss. Meanwhile, economic recovery hopes were supported by news that EU countries agreed to ease COVID-19 travel restrictions on non-EU visitors, while EU Commission chief Ursula von der Leyen said the EU vaccination campaign was catching up with that of the US. Elsewhere, economic data showed German producer prices rose in April by the most in nearly a decade, adding to signs of growing inflationary pressure in Europe’s largest economy. At the same time, the US Fed minutes suggested policymakers could soon talk about starting to scale back stimulus.
Brazilian Equities Little Changed
Brazil’s Ibovespa traded near the flatline at 122,527 on Thursday, as investors weighed prospects of a global economic recovery against concerns over a premature withdrawal of monetary stimulus.
Dollar Eases as Fed Minutes-Fuelled Bounce Fades
The dollar index edged down to below 90 on Thursday, but remained slightly above 3-month lows of 89.7 hit in the previous session as investors appear to shrug off worries the Fed will tight monetary policy soon. Latest FOMC minutes showed some policymakers consider appropriate to begin discussing a tapering plan at some point in upcoming meetings if the world’s largest economy continues to pick up strongly and inflationary pressures persist. Still, officials generally reinforced the economic recovery is far from complete and expect inflationary pressures to be transitory.