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Despite a sharp drop in risk assets, the industrial metals complex is thus far holding its ground — although the red metal has underperformed in the overnight session, economists at TD Securities report.

Key quotes

“Large scale risk-off flows, combined with a continued round of CTA selling, were sufficient pressure to send copper below its recent range.” 

“The spreading coronavirus raised fears that an anticipated ‘V-shaped’ recovery may well morph into a ‘W or U-shape’ — but real-time data out of China is still improving on the margin.” 

“The range of potential outcomes is wide, but while trend followers may be set to add to their shorts in copper, the marginal piece of information out of China remains positive.”