Commodity markets are rallying one minute and then slumping the next as continuing mixed economic news continues to emerge.
While there is hope that a deal on Greece’s debt will be done soon and positive intentions from eurozone leaders to get a deal done, there was also disappointing news from the US. Previously, economic indicators had tended to be on the positive side for the world’s largest economy, but the news that house price fell more than expected in November, a fall in consumer confidence in January and growth slowing in the Midwest in the same period, put a downer on the market.
Only for it to pick up again on news that Chinese manufacturing data improved in January. The official purchasing managers’ index increased to 50.5 from 50.3 in December. Analysts had expected a figure below 50, which would have signalled a fall in manufacturing confidence.
Copper was starting to edge up in early trading this morning as a result of this data after slipping to $8,360 (£5,300). This compares to the official price of $8,495 (£5,383) yesterday. Overall, copper was up over the month of January with the first day of trading at the beginning of the year seeing a price of $7,679 (£4,920).
Aluminium was up in January overall, with the metal priced at $2,034 (£1,303) on 3 January, it had increased to $2,298 (£1,456) by the end of the month yesterday.
The pound continues to get stronger against the dollar and was close to the 1.58 mark yesterday at 1.5781. On 3 January, it was at 1.5607 but was as low as 1.5317 on 16 January.
Brent crude oil is also on the rise following the Chinese data and news that US lawmakers are considering increased sanctions against major oil supplier Iran. Brent crude was up 70 cents to $111.68 a barrel at 9:15am this morning.
Cotton’s decline continues however, and has now reached $85.86 per pound. At this time last year, cotton was trading at approximately $211 per pound.