Metals- Copper and Zinc
The commodity price are looking up as traders are happy about the easing monetary policy by the Fed. But, most of the optimism is around China, that the country’s economy may be turning around and all the labour by the People Bank of China may see its fruit soon. This is impacting the price of industrial metals such Zinc and Copper. The dollar weakness is another factor which is helping these metals to bounce higher.
Oil
We are still very much skeptical about the recent rally in oil and we do think that may not last for long. The concept that we have formed a bottom is a little premature because fundamentals have not changed and we have no evidence of any supply cut from OPEC. Infant, the members have declined to hold any conference or meeting before their scheduled deadline. And if you are buying oil on the basis that there have been CAPEX cut and rigs are offline which will help to evaporate the supply glut- which is nearly 2 m/b, then you are certainly not focused. These rigs will come online soon the price of oil goes above 50 and the speed of these will be as fast as some one has just turned on the light switch.
Disclosure & Disclaimer: The above is for informational purposes only and NOT to be construed as specific trading advice. responsibility for trade decisions is solely with the reader.
by Naeem Aslam