Copper Rebounds From 5-Week Low as Summers Drops Out of FJoe Richter and Agnieszka Troszkiewicz
Copper futures rose for the first time in five sessions on speculation that policy makers will be less inclined to curb stimulus after former Treasury Secretary Lawrence Summers withdrew his bid to head the Federal Reserve.
Summers would have tightened Fed policy more than Janet Yellen, who was his main rival to replace Chairman Ben S. Bernanke, according to a Bloomberg Global Poll last week. Reports on Sept. 13 showed U.S. retail sales rose less than forecast and consumer confidence fell, signaling weakness in the economy before Fed policy makers start a two-day meeting tomorrow where they will consider paring stimulus.
“Of the two leading candidates for the Fed chairmanship, Summers was widely regarded as more willing to taper,” Edward Meir, an analyst at INTL FCStone in New York, said in a report today. “U.S. numbers that came out on Friday did not leave much to cheer about and strengthen the case for a mild taper, or arguably none at all.”
Copper futures for delivery in December advanced 0.6 percent to settle at $3.222 a pound at 1:17 p.m. on the Comex in New York. The metal fell 1.8 percent last week.
The U.S. is the world’s biggest copper consumer after China.
The dollar touched a two-week low against the euro.
“The dollar has weakened as the next Fed chairperson is now likely to be Dr. Yellen, who is a proponent of current policy, rather than a tighter one,” Michael Turek, a senior director at Newedge Group SA in New York, said by e-mail. “So gradual tapering seems to be the way forward.”
Copper stockpiles tracked by the London Metal Exchange fell for an eighth session to 574,675 metric tons.
On the LME, copper for delivery in three months advanced 0.6 percent to $7,085 a ton ($3.21 a pound). Tin also gained in London, while aluminum, lead and zinc were lower. Nickel slid less than 0.1 percent.