The price of copper continues to stay in the green in this morning's trading session. It is expected that prices can maintain their upward momentum throughout today's session, driven by the stimulus signals from China, while macroeconomic pressures are weakening.

In a speech late on Monday (January 8), Zou Lan, head of the monetary policy department of the People's Bank of China (PBOC), stated that the PBOC could use open market operations, medium-term lending facilities, and reserve requirements along with other monetary policy tools to support credit growth. This move by the PBOC official has increased confidence that China will continue to ease monetary policy to support the economy. Consequently, copper prices have also benefited.

Additionally, analysts pointed out that this is a ripe time for China to further ease its monetary policy. The yield on China's 10-year government bonds is at its lowest level in nearly four years. Furthermore, policymakers may begin to shift focus from stabilizing foreign exchange to easing monetary policy, as concerns about the devaluation of the yuan are gradually being alleviated. Meanwhile, major commercial lenders have recently cut deposit rates.

Thus, the market has high expectations that China will intensify easing in the near future. If these expectations are confirmed, copper prices may rise again.

For precious metals, silver and platinum prices extended their decline this morning. However, prices may rebound thanks to the weakening of the US dollar. Data from the New York Federal Reserve shows that Americans expect inflation to drop significantly, putting pressure on the greenback.

Specifically, the New York Fed stated that US inflation in the next year is expected to be at 3%, the lowest level since January 2021. For long-term inflation, survey participants predict inflation over the next three years to be 2.6%, compared to 3% in the November forecast, while five-year inflation is expected to be 2.5%, compared to 2.7% in November.

Source: MXV