Overview
Positive economic data from the US, China and Germany helped lift investors’ sentiment last week, with copper and other industrial metal seeing strong demand. The ECB president’s reassurances at the Eurozone leaders meeting in Frankfurt last week that the worst is behind us also contributed to the improved sentiment. Gold ETPs on the other hand saw US$85m of outflows.…
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Long copper ETPs record US$25m of new inflows, bringing 1 month inflows to a substantial $116m this month . ETF Securities’ Copper ETCs have had strong demand since late last year as it has become increasingly apparent that the US and China economies are recovering. China’s Q4 GDP and industrial production numbers exceeded expectations, confirming other positive numbers over the past months. At the same time, ETFS Tin (TINM) saw US$6.3m of outflows last week following a 6% price rally over the past month. Tin fundamentals for 2013 appear positive, as export restrictions in Indonesia, coupled with an expected pick-up in Chinese demand, are likely to keep prices supported.
ETFS Agriculture (AIGA) sees the largest inflows in almost a year, totalling US$42.3m, on bad weather expectations in Brazil and the US . Soybeans, corn and wheat are the three biggest weights in the DJUBS index tracked by ETFS. Early in the week, heavy rain forecast in Brazil set soybeans on a rally, as markets pondered whether the country would still be able to deliver the promised record crop. At the same time, choppy trading characterised the corn market. Concerns over persistent drought conditions in the US Southern Plains contrasted with slowing demand from makers of ethanol, keeping prices in a tight trading range.
Gold ETCs see US$85m of outflows on growth uptick . Chinese and German manufacturing (Markit) Purchasing Managers Indices for December all beat consensus expectations. The US Conference Board’s Leading Economic Indicator and Germany’s IFO and ZEW surveys also beat expectations, pushing tactical investors to scale back their gold holdings. However, continued high sovereign risks, low interest rates, central bank buying and a weaker US dollar are expected to be supportive for gold in 2013.
Profit taking drives US$11.1 of outflows from oil ETCs. The Seaway pipeline in the US resumed operations, potentially helping to reduce the glut of crude oil in the US Midwest, supporting WTI prices. Brent climbed to a 3-month high on Thursday on the back of positive economic data from US, China and Germany, prompting investor profit taking. At the same time, ETFS Leveraged Natural Gas (LNGA) saw US$14.4m of outflows as the Henry Hub natural gas price hovers near the high end of its recent trading range.
Key events to watch this week : US Q4 GDP, FOMC rate decision and non-farm payrolls. This week the focus will once again be on the US economy, with several economic releases coming out in the next few days. Investors will likely focus on the next FOMC meeting and non-farm payroll data as lower unemployment is a key priority for the US Fed. US Q4 GDP data and ISM manufacturing will also be monitored, with above expected numbers likely having a positive impact on industrial metals. Eurozone and China PMI data will also be released this week.
Source: ETFWorld.co.uk
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