METALS: Copper Up As Trump Tariff Threat Classes With Softer Demand Signals
Feb-26 00:53
The active copper contract, per CMX, is holding close to $470. This is holding the bulk of the gains from late in Tuesday US trade, as Trump called on the US Commerce Department to investigate potential tariffs on copper.
- In a Truth Social post, Trump stated: ""Like our Steel and Aluminum Industries, our Great American Copper Industry has been decimated by global actors attacking our domestic production. To build back our Copper Industry, I have requested my Secretary of Commerce and USTR to study Copper Imports, and end Unfair Trade putting Americans out of work. Tariffs will help build back our American Copper Industry, and strengthen our National Defense"
- For CMX copper, upside focus may rest on a test above $480, which we couldn't sustain earlier in Feb. Recent lows rest at $451.6. The base metal is above all key EMAs, with the 20-day near $457.
- More broadly, the Bloomberg base metals sub index has been under some pressure, with softer US data outcomes creating some global growth concerns. The chart below overlays the Citi global economic surprise index (the white line on the chart) against the Bloomberg base metals series.
- The risk of copper tariffs will add fresh uncertainty to the outlook, given some signs US economic momentum is moderating. For China, focus is likely to be on the upcoming "Two Sessions" gathering and what stimulus measures may unfold from that.
Fig 1: Citi Global Economic Surprise Index & Bloomberg Base Metal Prices
Source: Citi/MNI - Market News/Bloomberg
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US TSYS: Cash Bonds Open Richer After The Weekend’s Tariff News
Jan-27 00:21
TYH5 is dealing at 108-19+, +0-04+ from NY closing levels, in today’s Asia-Pac session.
- US stock futures are dealing lower ahead of key earnings week, with the S&P 500 and the Nasdaq down ~0.50%.
- “In a social media post on Sunday, Trump said he ordered an emergency 25% tariff on all Colombian goods coming into the US, which will be raised to 50% in a week. Oil, gold, coffee and flowers top the list of exports, according to Colombia’s tax authorities.” (per BBG)
- Cash bonds are dealing 1-3bps richer in today’s Asia-Pac session, with a flattening bias, after finishing Friday mildly stronger.
- Focus this week is the FOMC policy announcement on Wednesday.
GOLD: Gold Opens Cautiously in Asia As Tariff Risk Heightens.
Jan-27 00:05
- Gold has had a stellar start to 2025 and last week delivered the best weekly gains thus far.
- Gold gained +2.4% last week driven by a ‘safe-haven’ bid in the face of mounting tariff risks.
- This week has started no differently with news that President Trump intends to levy up to 25% tariffs on Colombia following the turning away of a flight from the US, deporting illegal immigrants.
- Gold closed Friday at US$2,770.58 and has given some of that back in early trading, down to $2,767.00
- Over the weekend Ghana’s released it’s trade surplus details, rising US$5bn, driven by a 50% increase in gold exports to $11.6bn.
ASIA: Government Bond Issuance Today.
Jan-26 23:46
- Thailand to Sell 40 Billion Thb of 182-Days Bills
- MAS to Sell S$15.9 Billion 25-Day Bills
- MAS to Sell S$22.5 Billion 83-Day Bills
- Philippines To Sell PHP 7.0Bln 90D Bills (PH0000058463)
- Philippines To Sell PHP 7.0Bln 181D Bills (PH0000058935)
- Philippines To Sell PHP 8.0Bln 363D Bills (PH0000059818)
- Bank of Korea to Sell 1 Trillion Won 91-Day Bonds
