Big day for copper today, gaining 2.2% to 370.60 in New York.
I have watching this chart for confirmation of the negative bias in commodity currencies because it’s a critical component for construction and a great proxy for global growth.
An even better proxy for global growth are base metals, which also include aluminum,iron, nickel, lead and zinc. The problem is that Bloomberg’s base metals index doesn’t show the same kind of recovery.
The Bloomberg index is heavily weighted to aluminum (45%) which has been tanking since March. Each commodity is subject to unique supply/demand constraints and are skewed by Chinese stockpiling.
Overall, we’re left with a muddled picture of global growth/demand, which explains why markets are so data dependent at the moment. The copper move is positive, no doubt, but it’s frustrating trying to build conviction on where we’re going next.
