METALS-Copper prices hover near 17-month low as slowdown fears mount

BY Reuters | ECONOMIC | 07/03/22 11:00 PM EDT
       July 4 (Reuters) - London copper prices hovered near a
17-month low on Monday, as soaring inflation and tepid factory
data renewed fears of aggressive rate hikes and global economic
slowdown, hitting demand for metals.

    FUNDAMENTALS
    * Three-month copper on the London Metal Exchange
held its ground at $8,040 a tonne, as of 0227 GMT, after hitting
its lowest since February 2021 at $7,955 on Friday.
    * The most-traded August copper contract in Shanghai
         fell 1.9% to 61,400 yuan ($9,166.78) a tonne.
    * From the United States to the euro zone, activity at
factories slowed to levels last seen during the initial wave of
the pandemic.
    * Euro zone inflation hit a record high in June as price
pressures broadened, and its peak could still be months away,
firming the case for rapid European Central Bank rate hikes
starting this month.
    * U.S. manufacturing activity slowed more than expected in
June, with a measure of new orders contracting for the first
time in two years, signs that the economy was cooling amid
aggressive monetary policy tightening by the Federal Reserve.

    * The dollar kept trade-sensitive currencies pinned near
multi-year lows on Monday and the euro was under pressure as
investors sought safety due to worries about slowing global
growth.
    * A stronger greenback makes dollar-denominated metals more
expensive for other currency holders.
    * Chile's finance minister Mario Marcel on Friday introduced
a tax reform bill that increases copper mining royalties on
companies that produce more than 50,000 tonnes a year and raises
taxes on high-income earners.
    * Cities in eastern China tightened COVID-19 curbs on Sunday
as coronavirus clusters emerge, posing a new threat to China's
economic recovery under the government's strict zero-COVID
policy.

    MARKETS NEWS
    * Asian share markets started cautiously on Monday as a run
of soft U.S. data suggested downside risks for this week's June
payrolls report, while the hubbub over possible recession was
still driving a relief rally in government bonds.


    PRICES
    Three month LME copper
    Most active ShFE copper
    Three month LME aluminium
    Most active ShFE aluminium
    Three month LME zinc
    Most active ShFE zinc
    Three month LME lead
    Most active ShFE lead
    Three month LME nickel
    Most active ShFE nickel
    Three month LME tin
    Most active ShFE tin


    ($1 = 6.6981 yuan)

 (Reporting by Brijesh Patel in Bengaluru; Editing by Sherry
Jacob-Phillips)



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.

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