Metal markets are torn in the trade dispute between the US and China
by David Fleschen
The metal markets are torn in the trade dispute between the US and China says the German reseach institute Commerzbank Reseach. Yesterday, they got support from strong stock markets. This morning optimism still prevails after US President Trump made a positive statement. He would want to meet his Chinese counterpart Xi for further discussions in the trade dispute and praised China's purchases of soybeans. He also stated that he wanted to intervene in the case of the top manager of a large Chinese technology company arrested in Canada (she was released on bail last night), if that would favor a trade agreement with China. China, on the other hand, is probably on the verge of significantly reducing import tariffs on US cars. That the optimism of the market participants can also quickly disappear again, became apparent last week, when the truce that Trump and Xi had agreed at the G20 summit was quickly ticked off. The emerging pessimism was reflected in a retreat of speculative financial investors on the LME, which had significantly reduced their net long positions on some metals, probably contributing to the drop in metals prices over the past week. With metal prices quoted a bit higher this week, speculative financial investors are likely to be a little better again.
Source: Commerzbank Research, photo: fotoalia