The opinions expressed in this report are those of Inspirante Trading Solutions Pte Ltd (“ITS”) and are considered market commentary. They are not intended to act as investment recommendations. Full disclaimers are available at the end of this report.
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Highlights
Upcoming economic events (Singapore Local Time):
|
Date |
Time |
Venue |
| 2026-07-02 | 20:30 | U.S. Unemployment Rate |
| 2026-07-09 | 02:00 |
FOMC Minutes |
| 2026-07-09 | 09:30 |
China Inflation Rate YoY |
| 2026-07-14 | 20:30 | U.S. Inflation Rate (June) |
| 2026-07-15 | 20:30 | U.S. PPI (June) |
| 2026-07-24 | 07:30 | Japan Inflation Rate YoY |
Market snapshots
Figure 1: Copper (HG) futures - Weekly
Copper has trended higher inside a multiyear ascending channel, with each major pullback finding support on the rising lower trendline. This week's sharp reversal pulls price back from the upper half of that channel toward that rising support.
Figure 2: 30-Year U.S. Treasury Bond (ZB) futures vs. DXY - Weekly
For much of the past three years, T-Bond (ZB) futures and the dollar (DXY) moved in a loose, intermittent inverse relationship. Since around April 2026, that has flipped, with both bond prices and the dollar index moving higher, a notable regime shift to watch.
Figure 3: Gold (GC) futures - Weekly
Gold is now testing the $4,000 support for the first time since November 2025, down nearly 30% from January's record high, as a hawkish Fed and a 13-month high dollar weigh on the metal. A sustained break below could open the door to further downside.
Figure 4: Live Cattle (LE) futures - Daily
Live cattle has more than doubled since 2021 and is now coiling in a tight symmetrical triangle just below its record highs near 260 cents. A break above the triangle’s upper bound would signal the uptrend resuming, while the rising lower trendline is the support to watch.
Beyond the charts
It's been a strong year for copper. Prices climbed from the low $5 range in spring to a fresh high above $6.40 this week, before reversing sharply to close down 5.86%. That reversal comes down to three forces landing at once.
The most immediate is the Fed. Kevin Warsh's first FOMC meeting as chair on June 17 left rates unchanged, but markets moved on the dot plot, not the decision. The median projection for the federal funds rate at year-end 2026 rose to 3.8%, up from 3.4% in March, flipping the signal from an implied cut to a hike-leaning path. The dollar took the cue and ran with it, climbing to a 13-month high. A U.S.-Iran peace framework would normally have pulled the other way – a risk-on, dollar-negative development – but the Fed's hawkish shift outweighed the de-escalation. A stronger dollar makes a dollar-priced commodity like copper mechanically more expensive for the rest of the world, and copper has felt that directly.
At almost the same time, copper's own supply chain started healing on two separate fronts. Sulfuric acid availability, a critical input for copper leaching and refining, improved as Middle East tensions eased, loosening a bottleneck that had squeezed processing capacity for months. Separately, Rio Tinto resumed copper concentrate exports from its Oyu Tolgoi mine in Mongolia after a brief blockade over revenue-sharing disputes halted shipments for nearly a day. Both developments removed layers of scarcity that had been propping prices up, arriving right alongside the dollar's move.
Lastly, the tariff premium is starting to unwind. For months the market front-ran a looming U.S. tariff decision: the COMEX-LME spread widened to roughly $400 a ton, and U.S. imports surged from February, pushing COMEX inventories to a record 654,038 tons as of June 22 at the expense of LME and SHFE stockpiles. Part of that stockpiling premium is now bleeding back out of the price. The decision itself still lands by June 30, when the Commerce Secretary must report on U.S. copper markets, after which the president may impose a phased tariff on refined copper – 15% from 2027, rising to 30% in 2028. It remains a live, two-sided catalyst: a confirmed tariff would likely support copper prices globally, while a delay or rejection is the clearest downside risk into year-end.
These forces explain much of the price action, but not the demand picture underneath it, and that picture is genuinely split. China, still the world's largest copper buyer, is sending two signals at once. Its manufacturing PMI slipped to 50 in May, the weakest since February, and copper concentrate imports have stayed subdued. But EV and AI-linked demand is moving the opposite way: China's copper demand from EVs alone is forecast to hit 1.84 million tons this year, and processors in Ningbo report orders already booked through 2027. The same rotation is visible well beyond China, as copper is increasingly priced off Nvidia's earnings and the broader AI trade rather than off Chinese construction data, with data-center buildout emerging as a genuine new source of long-term demand.
Net it out, and those three forces explain this week's pullback. But copper's real tension runs deeper: an old economy that's cooling against a new one that's accelerating, with a binary tariff decision only days away that could tip the whole complex either way.
A hypothetical guide: From ideas to application
We conclude with the following hypothetical trades:1
Case study 1: Long Copper futures
If we hold a bullish view on metals, we will consider taking a long position in Copper (HG) futures at the current price of $6.035, with a stop-loss below $5.80, a hypothetical maximum loss of $6.035 – $5.80 = $0.235 per pound, or $5,875 per contract. If the demand rotation continues and copper resumes its climb toward the recent high near $6.4035, HG futures have the potential to rise toward $6.40, resulting in a hypothetical gain of $6.40 – $6.4035 = $0.365 per pound, or $9,125 per contract. Each full cent move in HG futures is worth $250 per contract. Micro Copper (MHG) futures offer a smaller-sized contract for those seeking the same directional exposure with reduced capital outlay.
Case study 2: Long Live Cattle futures
If we hold a bullish view on cattle amid historically tight herd supply and resilient beef demand, we will consider taking a long position in Live Cattle (LE) futures at the current price of 247.225 cents, with a stop-loss below 240 cents, a hypothetical maximum loss of 247.225 cents – 240 cents = 7.225 cents per pound, or $2,890 per contract. If supply tightness persists and a breakout above the triangle resolves the consolidation higher, LE futures have the potential to extend toward 265 cents, a measured move beyond the current record high near 260 cents, resulting in a hypothetical gain of 265 cents – 247.225 cents = 17.775 cents per pound, or $7,110 per contract. Each full point (1 cwt) move in LE futures is worth $400 per contract, given the 40,000 lb contract size.
1 Examples cited above are for illustration only and shall not be construed as investment recommendations or advice. They serve as an integral part of a case study to demonstrate fundamental concepts in risk management under given market scenarios. Please refer to full disclaimers at the end of the commentary.
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