London copper slips after Moody's downgrades China

London copper fell on Wednesday after credit ratings agency Moody's downgraded China due to its massive debt, with muted trade expected ahead of the release later in the session of minutes from the Federal Reserve's last meeting. "After a set of less-than-positive U.S. data, a debt (agency) downgrading China, Noble struggling ... and the banks reporting a 29-percent drop in commodities revenue, the markets were always going to struggle and struggle they are," said Kingdom Futures in a report. 

  • LME COPPER: London Metal Exchange copper was down 0.7% at $5,671.50 a tonne as of 0700 GMT, after closing slightly higher in the previous session. Prices have fallen from near two-year peaks above $6,200 in February to a $5,480-$5,720 range since early May after the rally sparked a flood of scrap supply.
  • SHFE COPPER: Shanghai Futures Exchange copper edged down as much as 0.4% to 45,780 yuan ($6,645) a tonne.
  • NICKEL: Nickel was particularly hard hit, falling by 1.7% in London and 2.3% in Shanghai, dragged down by losses in steel and after China trade data showed a surge in ore imports from the Philippines.
  • CHINA: Moody's Investors Service downgraded China's credit ratings on Wednesday for the first time in nearly 30 years, saying it expects the financial strength of the economy will erode in coming years as growth slows and debt continues to rise.
  • FED: Immediate market focus was on the minutes of the Fed's latest policy-setting meeting, set for publication at 1800 GMT on Wednesday. The market already expects the Fed to hike interest rates in June, but given the greenback's recent weakness, dollar bulls are expected to welcome any hawkish hints by the central bank.
  • U.S. PROPERTY: New U.S. single-family home sales tumbled from near a 9-1/2-year high in April, but the housing recovery likely remains intact amid a tightening labour market.
  • BANKS: Commodities-related revenue at the 12 biggest investment banks plunged 29 percent year-on-year in the first quarter of 2017 to its lowest in more than a decade, mainly due to weakness in the energy sector, a consultancy said on Wednesday.
  • NOBLE: Struggling commodity trader Noble Group Ltd said on Wednesday it was still in discussions with various potential strategic parties as it sought to regain market confidence, but its shares fell 11% in early trade.
  • China's imports of refined copper in April slid by 41$ from a year ago, trade data showed on Tuesday, as traders found their buying power crimped by tighter access to credit.
  • MARKETS: Asian shares edged lower in early trade on Wednesday, while the Australian dollar and the offshore Chinese yuan slipped after Moody's cut China's credit rating.