Copper Prices Edge Higher on Optimism in European Equities

Strategic Insights -

Copper futures rose 3.05 cents to $3.4405 a pound on the Comex division of the New York Mercantile Exchange, marking a cautious optimism in European equities markets and a steady euro after a successful Italian debt auction eased worries about the short-term stability of the euro zone. The Italian auction was well received, with the country paying sharply lower borrowing costs than a month ago, and was described by INTL FCStone analyst Edward Meir as "an important development" that will likely prevent more concerted selling from setting in. The copper market has been sensitive to investor sentiment toward Europe's debt crisis, with copper prices mirroring moves in the European common currency.

Key Takeaways:

  • Copper futures increased 3.05 cents to $3.4405 a pound on the Comex division of the New York Mercantile Exchange.
  • The Italian debt auction was successful, with the country paying sharply lower borrowing costs than a month ago.
  • The Italian auction was described by INTL FCStone analyst Edward Meir as "an important development" that will likely prevent more concerted selling from setting in.
  • Copper prices have mirrored investor sentiment toward Europe's debt crisis, with copper prices sensitive to moves in the European common currency.
  • The copper market has experienced large moves in response to thin trading conditions, with prices showing significant fluctuations in the absence of significant market direction.
  • The Italian auction was part of a series of economic data releases from the world's largest economy, which had helped push copper futures to a two-week high on Friday.
  • Comex and the London Metal Exchange were closed on Monday, and the LME remained shut Tuesday, contributing to low trading activity.

Statistics:

  • Copper futures rose 3.05 cents to $3.4405 a pound on the Comex division of the New York Mercantile Exchange.
  • The Italian debt auction paid sharply lower borrowing costs than a month ago, easing worries about the short-term stability of the euro zone.
  • Copper prices have shown large moves in response to thin trading conditions, with significant fluctuations in the absence of significant market direction.
  • Trading activity on Wednesday remained lower than normal, with some traders still out between the Christmas and New Year holidays.

Sources:

  • Dow Jones Commodities News via Comtex, Dec 28, 2011
  • Matt Day, Dow Jones Newswires, 212-416-4986, matt.day@dowjones.com