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Research Report
Weekly

Commodity Research Report: Metals and Energy Weekly Report

U.S existing home sales crushed expectations climbing 6.5% in July to an annualized pace of 5.39 million units. This was up 17.2% year-over-year. June's numbers were revised lower to show a 1.6% fall to 5.06 million units.
26 Aug 2013 | 05:56 PM

Highlights:

  • U.S existing home sales crushed expectations climbing 6.5% in July to an annualized pace of 5.39 million units. This was up 17.2% year-over-year. June's numbers were revised lower to show a 1.6% fall to 5.06 million units.
  • Fed minutes showed almost all FOMC members at July meeting were of the view that change to Fed's asset purchase program not yet appropriate.
  • Few members stressed patience in decision to reduce bond buys whereas a few members suggested it is high time to 'slow somewhat' purchase pace.
  • Several Fed participants are willing to consider lowering 6.5% unemployment threshold for interest rates if easier policy needed.
  • The Eurozone's purchasing managers' index, a key gauge of growth in both the manufacturing and services sectors, rose to 51.7 points in August from 50.4 in July, according to financial information company Markit. It was the highest reading since June 2011 and supported expectations that the Eurozone's recovery from recession is gaining momentum.
  • HSBC Corp. said the preliminary version of its monthly PMI for Chinese manufacturing rose to 50.1 for August, a sharp improvement from July's figure of 47.7
 
Week ahead: Copper (Buy)
  • Strong PMI data outcomes from China and the Eurozone is expected to support copper prices in the week ahead.
  • Recent statement from the Fed that they are not in a hurry to start tapering bond purchases, may also underpin red metal's prices.
  • Dollar is losing its value against a basket of currencies. This may help copper prices surge in short term.
  • Stockpiles at LME fell 3.4 percent this week, the most since September. The drop in inventories at both LME and Shanghai is a positive sign for copper prices.