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Copper acts like it knows something is going to happen – look east

Is the PBOC about to cut rates?

Copper took a big step up this week and is back to its best levels since May.

You can muster a multitude of reasons, especially on a day when the S&P 500 is up 69 points to 4432. Covid is fading and governments are not cutting spending. In the long run, massive spending is happening on green energy and it’s a direct game on copper.

In the short term, however, the timing is still curious.

One of the reasons could be the PBOC. ANZ released a note this week indicating that a 50 basis point cut in the RRR could occur as soon as today. Alternatively, we could see a targeted MLF.

This is something to keep in mind for copper, Chinese stocks and commodity currencies as well as all of the global trade risks.

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