The macro
1 Friday's U.S. nonfarm payrolls report came in at 315,000 in August, after a 526,000 gain in July. The unemployment rate rose 0.2 percentage point to 3.7%, though the labor force participation rate rose to 62.4%, the highest since the pandemic, and hourly wages rose 0.3% month-over-month and 5.2% year-over-year, slightly missing expectations. The financial market's bet on an interest rate hike of 75 basis points in September has slightly decreased and is still higher than 50%. The more critical data is the CPI data in August. The market sentiment is volatile and lacks sustainability.
2. On Friday, Russia announced that the Nord Stream 1 turbine, which had been repaired, was faulty and could not be restored. By Monday, the pipeline had been reduced to zero. On Friday, the G7 announced it would impose price caps on Russian oil and gas, and the European Union plans to impose price controls on energy. In response, Russia said it would stop exporting energy to countries that impose price caps. As the European Union's energy crisis continues to intensify, watch to see if the complete shutdown of Nord Stream 1 will lead to a new round of panic hype. In addition, PPI in the euro area rose 37.9% in July from a year earlier, up 1.9 percentage points from the previous month. More industrial companies in Europe are under pressure to cut production as the region's energy crisis deepens. The dollar index dipped on Friday and traded above 110 again today as energy fears in Europe pointed to a deepening recession in Europe, making the greenback more attractive. A bearish
3. As the epidemic continues in many places in China, the scope of lockdown is expanding. Since September, with the disappearance of high temperature power rationing factors, it should have ushered in the peak season of production catch-up, but the epidemic continues and the lack of real estate sales, the overall economic recovery expectations continue to weaken. A bearish
4. Conclusion: The worsening energy crisis in Europe and the continued epidemic in China weakened the confidence of economic recovery, and the overall negative situation gradually strengthened the spot
1. LME inventory decreased by 3,700 tons, and the total volume decreased to 110,000 tons, with a weekly decrease of 10,000 tons. Warehouse cancellation orders decreased synchronously.
2. The inventory of Shanghai Exchange increased by 2500 tons to 37,000 tons. According to the data of Steel Link, the inventory of domestic stream consumption area last week was 69,000 tons, increasing by 10,000 tons month-on-month, while the bonded inventory was 100,000 tons, decreasing by 13,000 tons month-on-month. Due to the gradual recovery of refinery production after the end of power rationing, and the high price of spot water to promote customs declaration has high enthusiasm. And consumption in the end of the high premium water consumption has a significant inhibitory effect. However, as copper prices fell late last week, the premium recovered to 400 yuan, and the premium remained above 500 yuan from September to October, leaving the overall high premium pattern unchanged. Due to unfavorable price comparison in the past two weeks, imports may decrease again in the later period, and the overall low inventory pattern is difficult to change.
3. In terms of downstream consumption, SMM statistics last week refined copper rod enterprise operating rate increased 7 percentage points to 73.6% compared with the previous week, and copper scrap rod enterprise operating rate increased 4.5 percentage points to 48%. On the one hand, the end of power rationing and the sharp drop in premium stimulated the resumption of refined copper rod procurement. But the second half of the week after a large short-term drop in copper price fine waste spread narrowed again, low oxygen rod and fine copper price inverted again, fine copper rod to scrap copper rod to regain the price advantage. On the whole, the consumption in peak season has recovered moderately. At present, the copper rod factory has full production schedule. With the increase of new orders, the purchasing enthusiasm has also been significantly enhanced. But also to see 63,000 above the price of consumption has a significant inhibition.
4. Technically, copper prices fell rapidly after touching the 60-day moving average, and has fallen below the small platform of shock in August, and the end of the mid-term rebound. But in the last two days, Shanghai copper holdings to increase again, very high and low inventory + high premium + large holdings implied that spot contradictions are still very prominent, do not support the price of direct decline, copper prices are likely to be repeated, there are still crowded warehouse possible
