Copper climbs after China CPI and PPI data

Copper is a touch higher on the day despite mediocre CPI and PPI data from China.

Copper rods
Source: Bloomberg

Copper is edging towards 327 cents per pound after Beijing revealed its producer price index was unchanged, while its consumer price index declined.

Inflation in China slipped to 2.3% in June from 2.5% in May. The People's Bank of China’s target is 3.5%, so this leaves the Chinese authorities room to loosen their monetary policy.

In terms of copper, the PPI report is more important in the short term, as it relates to manufacturing. Even though there was little movement around the announcements, it is a bullish sign that the metal is slightly higher given the middle of the road figures overnight.

China will release its latest trade figures on Thursday at 3am, and traders will be keeping an eye on the level of imports in particular. Strong imports could drive the price higher and, as I previously stated, if copper hits 328 cents per pound it could target the 330 cents level, with the 323 region providing support.

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