LONDON, Aug 19 (Reuters) – There’s been a lot of talk about inverted yield curves over the past few days. Specifically, last week’s inversion of the two-year and 10-year U.S. Treasury notes has raised the spectre of recession, sending tremors through U.S. stock markets.
Financial market analysts are poring over their historical data for clues as to how likely and how severe a global contraction might be. Those who follow the copper market, however, will know that “Doctor Copper” with his honorary degree in economics got there first.
London Metal Exchange (LME) three-month copper has slumped from above $6,600 per tonne in April to a current $5,800. Global economic weakness is being led by the manufacturing sector with activity contracting or slowing just about everywhere. That includes China, the powerhouse of industrial metals demand.
Funds are now taking an ever more bearish view of copper’s prospects on the CME market. The current “big short” is the biggest yet seen and the only surprise is that copper has not yet cracked under the weight of all this money.
It helps that copper is once again going through one of its periodic supply squeezes. It helps a lot more that Chinese speculators don’t yet seem ready to turn as sour on copper as the CME bears.
For the rest of this article: https://uk.reuters.com/article/metals-copper-ahome/column-chinese-investors-hold-key-as-global-funds-turn-super-bearish-on-copper-andy-home-idUKL5N25F37U