Long copper ETP weekly outflows of US$140mn were the highest on record. Following strong inflows most of this year, outflows from long copper ETPs were their highest on record last week as investors took profit on the recent price bounce. Copper prices rose 2.7% last week, recovering some ground from the technical sell-off several weeks ago. As softer economic data cast a negative shadow on near-term outlook, investors saw an opportune time to reduce their exposure to the cyclical asset. In addition, the LME reported copper inventories rose for a 13th week. Large supply losses in the US and strikes in Chile may change the picture in the coming weeks and months.
Natural gas ETP outflows of US$23mn, as weather returns to normal. The colder-than-expected weather in the US in Q1 attracted tactical investors into natural gas most of this year. However, with NOAA (the US Government weather forecaster) expecting more normal spring weather in coming months, investors have begun to take profits.
Key events to watch this week: Investor attention will be focused on the ECB meeting this week, with the consensus expecting a cut in rates. That would mark a bold shift in the ECB’s thinking as it has traditionally been reluctant to move rates below 0.75%. FOMC members’ reaction to weaker activity will be closely monitored, while payrolls data for April will give some clarity on whether last month’s weakness in the US jobs market is the start of a new trend. The official Chinese PMI data will also help guide views on China’s growth outlook.