BS: Copper Falls as U.S. Jobs Data May Allow Fed to Reduce Stimulus
Nov. 3 (Bloomberg) -- Copper prices fell the most in a week after the U.S. boosted payrolls more than forecast in October, signaling the Federal Reserve may hold back on steps to stimulate the economy.
Companies in the U.S. added 43,000 workers, more than twice economists’ estimates, an ADP Employer Services report today showed. Today, the Fed may announce more so-called quantitative easing, such as bond purchases.
The jobs data “is definitely making it easier for the Fed to go softly on QE,” said Daniel Brebner, an analyst at Deutsche Bank AG in London. “We are due for a pullback.”
Copper futures for December delivery fell 6.55 cents, or 1.7 percent, to $3.7735 a pound at 11:16 a.m. on the Comex in New York. A close at that price would mark the biggest drop for a most-active contract since Oct. 27. The metal climbed 2.8 percent in the previous two days.
Policy makers will probably announce a plan to purchase at least $500 billion of long-term securities, according to economists surveyed by Bloomberg News before the ADP report.
“Anything below $200 billion will knock copper to the downside,” said Rich Ilczyszyn, a market strategist at Lind- Waldock, a broker in Chicago. “The market is a bit skittish before the quantitative-easing package. Fundamentally, nothing has changed.”
On the London Metal Exchange, copper for delivery in three months dropped $130, or 1.5 percent, to $8,305 a metric ton ($3.77 a pound). Zinc, tin, lead, nickel and aluminum also fell on the LME.
--Editors: Patrick McKiernan, Daniel Enoch
To contact the reporters on this story: Claudia Carpenter in London at ccarpenter2@bloomberg.net; Yi Tian in New York at Ytian8@bloomberg.net.
To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net.
