SPOT: The domestic market is closed during the National Day holiday. On the external side, LME copper rose 1.28 per cent during the National Day holiday, but inventories have been significantly higher since late September, while the premium is due to the Chinese market being closed, with demand also turning from positive to negative.

VIEWPOINT: the minutes of the Fed's September meeting were not particularly new in terms of data and events released over the holiday period, nor was there a clear indication of the interest rate curve controls. But then, on the afternoon of Tuesday (6 October) , President Donald Trump publicly rejected the Democrats'stimulus plan and ordered his representatives to stop negotiations until after the election, and this news is to make that day the majority of commodities are significantly weaker, copper varieties are not immune. But since then, copper prices have rebounded strongly, and since then, as Chinese demand has gradually returned from the holidays, given that the recent surge in LME stocks has partly met earlier concerns about continued weak demand for copper, the chances of a sustained recovery in the domestic economy were high in October, copper Price Outlook still relatively optimistic.

In the medium term, on the macro level, the probability that low interest rates and ultra-loose monetary policy will continue in the future is still high, which is a very favorable factor for commodities. At present, the US dollar is on the rise in a short time, but judging by long-term US bond yields, it looks as if the US is still reeling from a difficult economic recovery. At the basic level, at the moment there are still concerns about supply in the second half of the year, as major producing countries such as Chile were still severely affected by the epidemic in the third quarter, but on the demand side, as the most important demand country, china is currently the most effective country in terms of containment of new crown disease. It is therefore expected that the second half of the domestic economic activity continued to recover the probability of a larger. Before this, the State Grid Will 2020 grid investment plan at 460 billion yuan, but as far as the first half of the data, the actual investment in the grid only completed about a third, so there is also the possibility of rush in the second half of the year. It should be noted that the current strong copper prices will stimulate new production capacity to accelerate or even beyond the expected cashing, which may also be from the supply side of the copper price pressure.

STRATEGY:

 1. ONE-SIDED: overcautious 2. CROSS-MARKET: HOLD OFF 3. INTERPHASE: Not Yet; 4. OPTIONS: None

FOCUS:

 1. Whether the copper supply exceeds the expected release; 2. Whether the new epidemic continues to ferment; 3. Downstream resumption of work and whether the pace of production continued to slow down; 4. Whether the late counter-cyclical policy continued to follow up

Source: Huatai Futures

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