Copper was trading in a tight range during Asian trading hours on Thursday January 4 amid mixed market sentiment following the release of the Federal Open Market Committee (FOMC) minutes overnight.
The three-month copper contract on the London Metal Exchange was down $4 to $7,170.5 per tonne as of 02:40am Shanghai time.
The most-traded February copper contract on the Shanghai Futures Exchange (SHFE) was down 50 ($7.69) yuan per tonne to 54,800 yuan per tonne.
Minutes from the FOMC December meeting showed that its members expected United States GDP to grow 2.5% due to tax cut reforms, up from an earlier estimate of 2.1%.
“Most participants indicated that prospective changes in federal tax policy were a factor that led them to boost their projections of real GDP growth over the next couple of years,” the minutes stated.
The FOMC had voted to increase its benchmark interest rate a quarter point from 1.25% to 1.5%.
The dollar index on Thursday morning was down 0.03 to 92.19.
In data, the US ISM manufacturing index for December rose to 59.7 from 58.20 in November.
Meanwhile, MiFID II came to life on Wednesday, which lowered trading volumes in major exchanges.
“It being Mifid II “go live” day, many exchanges experienced lower volumes than usual and with FOMC minutes from the December meeting due for release this evening, those investors who had returned from the New Year holidays were largely sitting on their hands,” Sucden Financial said in a note.
In China, the December Caixin service PMI stood at 53.9, its highest reading since August 2014 and beating expectations of 51.8 and the previous 51.9.
Zinc and lead rise, rest fall
- The most-traded February aluminum contract was down 90 yuan to 14,975 yuan per tonne.
- The SHFE February zinc contract was up 25 yuan per tonne to 25,800 yuan per tonne.
- The SHFE February lead contract was up 5 yuan per tonne to 19,315 yuan per tonne.
- The SHFE May nickel contract was down 800 yuan per tonne to 97,820 yuan per tonne.
- The SHFE May tin contract was down 10 yuan per tonne to 145,040 yuan per tonne.
Currency moves and data releases
- In other commodities, the Brent crude oil spot price was down $0.02 at to $67.89 per barrel and the Texas light sweet crude oil spot price was up $0.04 at $61.84 per barrel.
- In equities, the Shanghai Composite Index was up 0.41% to 3382.9.
- In data, major economies including Britain, Spain, Italy, French and Germany are set to release final service PMI numbers for December; in the US unemployment claims, final service PMI and crude oil storage are key numbers to watch.