Base Metals Preview: MCX Copper Continues To Stay Supported

21 Jan 2022 , 09:02 AM

Copper futures raced up amid supportive US equities and lax Chinese monetary policy cues in last session. The COMEX Copper futures spiked more than 2% to advance near a three month high of $4.60 per pound. MCX Copper futures closed at Rs 760 per kg, adding around 1.5% on the day. China cut its benchmark lending rates for corporate and household loans for a second straight month at its January fixing on Thursday, while lowering a mortgage reference rate for the first time in nearly two years. The one-year loan prime rate (LPR) was lowered by 10 basis points to 3.70% from 3.80% and the five-year LPR was reduced by 5 basis points to 4.60% from 4.65%. The cut to the five-year LPR was the first reduction since April 2020.

Chinas central bank has already cut the borrowing costs of its medium-term loans for the first time since April 2020 to cushion any economic slowdown. The Peoples Bank of China (PBOC) said it was lowering the interest rate on CNY 700 billion of one-year medium-term lending facility (MLF) loans to some financial institutions by 10 basis points to 2.85% from 2.95% in previous operations.

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