The US10Y-US02Y yield spread has been rising recently in possible signs that a ‘soft’ landing may be possible from the Fed. One thing to note here is that if risk can recover then copper prices could also lift.
Look at the strong seasonal pattern for copper that is coming up with gains in 8 of the last 10 years over Sep 08 to Oct 14. Another potential catalyst would be any pick-up in the outlook for China’s growth that has the potential to lift copper prices too.
Major Trade Risks: The major risk is that risk remains negative and demand for copper is still expected to fall.
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