The copper price is tanking, and not just nominally
As the upcoming FOMC is forced by market signals to keep its hawk suit on (as of today 54% of CME traders now expect a 1% rate hike with the remaining 46% in the .75% camp), global financial markets are bending to the pressure of Fed policy.
The daily chart of copper futures is eyeballing the key $3/lb. level after losing support at 3.30.
The weekly chart shows strong support at around 2.85. But this is the kind of damage we have expected in order to flip the macro counter-cyclical and anti-inflationary. It’s just one commodity asset, but it’s one that ingrained in the average market participant’s head as to its importance. Doctor Copper and his PhD in Economics and all.
In relation to the old monetary man (gold), himself not doing well nominally, you can see that the negative signal is in full effect for global macro markets and speculations.
We’ve reviewed a chart showing the negative implications of a declining Copper/Gold ratio (CGR) on stocks (now well into a bear market). But how about this more inflation/commodity-centric picture? The declining CGR imply an at least interim halt to the rising 30yr yield and eventually, if the ‘last inflated man standing (Energy)’ continues to fade that pressure would probably crack the CRB index beyond the normal correction it is current getting.
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