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Copper continued to benefit from surging risk appetite as speculators once again added to their long positions, strategists at TD Securities report. Credit Suisse sees the copper recovery as corrective.  

Key quotes

“On top of broad risk appetite, the red metal has benefited from increasing commodity demand as economies begin reopening, and as the market was anticipating major stimulus measures to be announced at the China NPC.” 

“While China did announce increases to both monetary policy and fiscal policy, including an increased local government bond quota which often funds commodity-intensive infrastructure projects, the amounts were less than expected and suggest a more measured increase in the credit and fiscal impulse. As such, the pace of long accumulation may slow as expectations are adjusted.” 

“The resurfacing of tensions in Hong Kong have sapped risk appetite and could see interest rush to the sidelines in the near-term.”