The metals markets have been marking time, partly because China has been on holiday celebrating the Year of the Snake and partly because a weaker euro has left the dollar looking stronger.
The euro was easing largely because the president of the European Central Bank told a press conference that economic weakness would prevail in the eurozone during the early part of 2013. The best prospect he could offer was for economic activity to recover gradually “later in 2013”.
He confirmed that real gross domestic product in the eurozone had declined by 0.2% quarter-on-quarter in the second quarter of last year, by a further 0.1% in the third quarter and that available data suggested further weakness in the fourth quarter and the beginning of this year.
Government figures in Germany, however, showed that industrial orders rose by 0.8% between November and December; this contrasted with a 1.8% decline noted in November. At the same time, industrial production in Germany rose by 0.3% in December. This followed a 0.2% decline in November, which was revised from an earlier estimate of a 0.2% rise for that month, and a 2% decline in October.
While analysts considered the last three months of 2012 to have been disappointing, they nevertheless took the view that the country’s industry was coming close to improving.
If the economic data in Europe was strengthening, political concerns persisted. The ruling People’s Party in Spain has not yet shaken off corruption allegations, and some analysts were expressing concern about the improved showing of Silvio Berlusconi in the Italian opinion polls ahead of elections on 24-25 February.
There was also news that China’s trade was doing better than expected. In January, exports and imports were higher than expected, respectively up by 25% and 28.8%. The country’s trade surplus also exceeded expectations at $29.15bn (£18.91bn).
There were also some figures from the US regulator, the Commodity Futures Trading Commission, which showed net speculative length (a measure of speculative interest) in copper at 183.6 tonnes in the week ended 5 February, well above its five-year average of 35.6 tonnes. This illustrates how the copper market is absorbing some of the money being pumped into the world economy to stop it from collapsing.