-1686821048.png)
Factory Output Falls
The latest data out of China overnight has given more cause for concern over the health of the world’s second largest economy. Industrial production was seen rising just 3.5% last month, down sharply from the 5.6% output seen over the prior month. This marks the slowest level of factory output since February and serves as further evidence of a slowing of the post-pandemic recovery there.
Retail Sales Slide
Additionally, retail sales over the same month were seen sharply undershooting expectations. Retail sales printed 12.7% in May, down from 18.4% the prior month and below the 13.7% the market was looking for. These are the latest set of data to show a growing trend of weakness in the Chinese economy and come just shortly after Chinese authorities ordered regional banks to cut their deposit rates, likely paving the way for a PBoC move in coming weeks or months.
Copper Impact
Fears over the health of the Chinese economy have seen softer trading in copper prices today. However, the metal still remains well up off the May lows and for now, continues with an upside bias. However, if we see further key data misses from China this could easily lead to fresh selling in the metal near-term.
Technical Views
Copper
The rally off the May lows has seen copper prices breaking back above the bull channel lows and above the 3.6745 level. This is a key area for the market and while above here, the focus is on a continuation higher in line with bullish momentum studies readings. For bulls, the next hurdle will be 3.9410 ahead of bigger resistance at the 4.1185 level.
.png)
Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.
Past performance is not indicative of future results.
High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% and 75% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Futures and Options: Trading futures and options on margin carries a high degree of risk and may result in losses exceeding your initial investment. These products are not suitable for all investors. Ensure you fully understand the risks and take appropriate care to manage your risk.
With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.