The Codelco Ventanas copper smelter in Ventanas, Chile. Photograph: Rodrigo Garrido/Reuters
Copper prices have jumped to their highest levels in almost a decade today, lifted by economic optimism and Jerome Powell’s dovish comments to Congress this week.
Reuters has the details:
The most-traded April copper contract on the Shanghai Futures Exchange rose as much as 4.5% to 70,740 yuan ($10,964.04) a tonne, a level unseen since March 2011, before easing to close at 70,150 yuan a tonne, still up 3.6%.
Three-month copper on the London Metal Exchange rose 2.3% to $9,518.50 a tonne by 0714 GMT.
Powell’s suggestion that the Fed might not meet its inflation goals for three years is a sign that US interest rates will remain at record low for a while, which should support demand for commodities.
Introduction: Markets rise as Powell calms nerves
The New York Stock Exchange yesterday Photograph: Nicole Pereira/AP
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
Markets are bouncing back today as anxiety about rising inflation fades, and after encouraging news about Johnson & Johnson’s one-shot Covid vaccine.
Last night, the Dow Jones closed at a record level, after America’s top central banker insisted that the US economy needed a lot more help — and that he would provide it.
Significantly, Fed chair Jerome Powell suggested it could take three years to get inflation back to target — a clear signal that stimulus measures won’t be removed soon.
He also didn’t appear alarmed about the boom in asset prices in recent months, or the recent rise in government bond yields — or the inflationary impact of a $1.9trn stimulus package.
This all helped to boost sentiment, and calm worries that the Fed could whip away the punch bowl too early, Deutsche Bank’s Jim Reid explains:
Risk appetite showed signs of returning to global markets over the last 24 hours as Fed Chair Powell stuck to his reassuring tone and continued to signal that the central bank would keep policy accommodative for some time to come.
With oil also at 13-month highs, and travel and hospitality stocks rallying hard this week, investors are anticipating brighter times – as Covid-19 vaccination programmes help the world economy to return to more normal times.
US traders also hailed the news that Johnson & Johnson’s one-shot coronavirus vaccine appeared safe and effective in trials, according to a report by US Food and Drug Administration (FDA) staff.
An advisory panel of independent experts decide on Friday to decide whether to recommend the vaccine be authorized. While the FDA is not bound to follow the advice of its experts, the agency did so when authorizing the Pfizer and Moderna vaccines late last year.
Edward Moya of OANDA says:
Expectations are high for the J&J vaccine to be distributed in the US over the next month.
Basic refrigeration and the fact that it is a single dose vaccine could be a gamechanger in the global fight against COVID.
European markets are expected to open higher, with Wall Street on track for further gains too.
Dow futures rise 100 points following index’s record close https://t.co/8DJPxtYrZs
- 10am GMT: Eurozone business and consumer confidence figures
- 1.30pm GMT: US weekly jobless figures
- 1.30pm GMT: US durable goods orders
- 1.30pm GMT: Second estimate of US GDP in Q4 2020
at 7.44am GMT
Source by www.theguardian.com