METALS-Copper dragged down by strong dollar ahead of Fed meeting

BY Reuters | ECONOMIC | 01/18/22 12:53 PM EST
    (Updates prices)
    By Zandi Shabalala
    LONDON, Jan 18 (Reuters) - Copper prices succumbed to
pressure from the dollar on Tuesday as the market anticipated a
more hawkish tone from the U.S. Federal Reserve in the run-up to
monetary tightening in March.
    The Fed meets next week after fairly aggressive comments
from officials about how tough they could be in the fight
against inflation.
    This led to a jump in U.S. Treasury yields that lifted the
dollar index        to its highest in six days and undermined
the appeal of dollar-denominated commodities.
    Risk sentiment was lower as a result, dragging stocks and
some commodities lower, said Commerzbank analyst Daniel
Briesemann.
    "But for the most part, participants are waiting on the
sidelines for a clearer statement that the Fed will start its
interest rate hike cycle in March," he said.
    Benchmark three-month copper         on the London Metal
Exchange (LME) eased 0.7% to $9,662 a tonne by 1735 GMT.

    POSITIONING: Speculators bet on prices falling, evidenced by
a net short position of 12.83% of open interest, estimates by
broker Marex showed. This is its highest since May 2020.
    INVENTORIES: Copper stocks continued to trend higher, with
inventories in LME-registered warehouses climbing by 2,000
tonnes to their highest in two months at 94,525 tonnes.
COPPER EXPORTS: Refined copper exports from China hit a
record high in 2021, customs data showed, after international
prices encouraged traders to ship metals overseas.
    TIN: Benchmark LME prices         for the metal used in
solder for electronics hit a record $42,335 a tonne, underpinned
by low inventories and stable demand. Later it was up 1.5% at
$42,315.
    EUROPE: Industry association Eurometaux has asked EU
policymakers to allow member states to support domestic
producers of aluminium, zinc and silicon with state aid to
ensure supplies of the metals crucial for the transition to
low-carbon energy.
    OTHER METALS: LME aluminium         was back above $3,000 a
tonne, helped by low inventories and risks to supply. It
climbed 0.7% to $3,019 a tonne.
    Zinc         added 1.4% to $3,559, lead         eased 1.4%
to $2,323 and nickel         was up 0.1% at $22,085.

 (Reporting by Zandi Shabalala
Additional reporting by Eileen Soreng
Editing by Barbara Lewis and David Goodman
)



In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.

fir_news_article