Copper Drops On Hawkish Fed-Speak & Weak China Data
Copper Sinks on Monday
Copper prices have started the week under heavy selling pressure with the futures market down around 2.7% on the session as traders digest weak data from China and mull its implications for the demand outlook there. Monthly industrial profits were seen rising at their slowest pace since November 2025 last month, fuelling concerns that the prior uptick in China data might well be cooling off. Copper prices had already been weaker over prior sessions in response to the lift in Fed tightening expectations for October.
Hawkish Fed Expectations
A raft of hawkish Fed commentary last week saw market pricing for an October hike jumping from just above 50% to around 70%. Policymakers were heard warning of the risks of inflation becoming entrenched at higher levels and the need for further policy tightening. This comes on the back of the hawkish dot-plot update we received at the September which shows that 12 of 18 policymakers now forecast at least one further hike this year. Looking ahead, Friday’s US jobs data will be key for gauging that October meeting and any fresh strength in the data should USD surging higher, putting greater pressure on copper prices near-term. Alternatively, if data undershoots on Friday this should see October rate hike pricing dropping again, helping underpin copper again for now.
Technical Views
Copper
The sell off in copper has seen price breaking back down through the bull trend line from YTD lows, now testing the 6.5830 level. This is a key test for bulls and if we break lower here, a triple top at the 6.8615 level looks likely to be in place, suggesting a move back down to 6.3825 next, in line with bearish momentum studies readings.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.