European economic situation is unstable Shanghai copper rebounds weak

The Shanghai Futures Exchange copper futures rebounded weakly in the morning of December 5, with the main contract 1202 closing at 57970 yuan/ton, up 250 yuan. The U.S. employment data performed better and the major central banks in the world increased the liquidity of the financial system, bringing good stimulus to the financial markets. China's central bank released its liquidity signals. The market generally expects CPI to fall further and the futures price will move upwards. However, in the short term, the economic situation in Europe is unstable. The outlook for China's manufacturing industry is still not optimistic, and the probability of rising prices is not yet available. It is expected that Shanghai copper will maintain its range of 56000-59000 volatility in the near future.

Data released by the Labor Department on the 2nd showed that in the United States, employment in the private sector continued to increase in November, and the unemployment rate also fell to its lowest level since March 2009. The number of people employed in private enterprises increased by 14 000, while the number of employees in government departments decreased by 20,000, and the number of non-agricultural employment increased by 12.0 million, which is close to the expectations of economists. This further proves that the economic recovery is accelerating.

In addition, investors expect that at the EU summit on December 9th, more convincing measures will be reached to resolve the European debt crisis and prevent further deterioration of the economic environment. The European Central Bank (ECB) president hinted on the 1st that if politicians decide next week to adopt tighter budgetary controls in the euro zone, then the central bank is prepared to act more aggressively to fight the European debt crisis.

Domestically, it is difficult for domestic and foreign central banks to completely reverse the tight and tight monetary policy pattern. China's central bank cut the deposit reserve ratio is only to honor the expectations of fine-tuning, rather than a full turn. At the end of the year, funds were tight and foreign exchange funds decreased. The space for capital injection through the central bank’s due bills has become increasingly limited. In addition, the increase in electricity prices has limited boost to non-ferrous metals. Considering the cost structure, copper consumes less power and therefore has less impact on copper smelting costs. Moreover, the current copper price is much higher than copper smelting costs.

The Bureau of Statistics will publish CPI figures on this Friday. The market generally expects that the CPI will fall further on the basis of last month, which will further ease the macro situation in the country. Then the policy goal of maintaining growth will be further mentioned. Space will also increase. However, in the short term, the metal is still facing relatively weak demand due to the impact of economic slowdown and weak demand.