How Does the Us Economic Indicators Effect the Copper Prices : a Quantitative Analysis

Although business leaders may not have a crystal ball to help them plan for the future, they do have access to a wide range of Federal Reserve publications that can help identify recent and current trends and what these economists believe will take place in the coming months. Given the lingering effects of the Great Recession of 2008 on the American economy today, identifying the future economic outlook for America using this type of freely available information therefore represents a timely and valuable enterprise. To this end, this paper provides a review of relevant publications to identify the Federal Reserve's current assessment of economic activity and financial markets, its current view about inflation and various monetary tools that have been used to stabilize the economic and prices in recent years. Finally, an analysis of the economic outlook for the next 12- to 18-month period is followed by a summary of the research and important findings in the conclusion.

The strength of the U.S. economy is important for Canada’s trade, economy and exchange rate. Increasing U.S. unemployment can positively or negatively influence the value of the loonie. Canada’s dollar can increase due to demand from buyers looking to invest in a stable economy with low risk. On the other hand, Canada’s GDP is dependent on U.S. trade. If less Americans are purchasing goods in Canada due to increased unemployment, the Canadian dollar will fall. Therefore, it is inconclusive that unemployment rates solely influence the rise of the Canadian dollar. There are many other factors that influence the exchange rate, such as commodity prices, investor confidence, overvalued currency and inflation rates.

Some experts believe that Trump’s economic policies will increase the inflation rate. Trump’s considered spending on infrastructure will potentially lead to an enlarged employment rate and a larger money supply within the economy. If exchange wars with China and Mexico actually happen, import prices could increase, which will lead to inflation. For example, just after the election results were broadcasted, the Mexican peso plummeted 7.3% opposed to the US dollar. The United States is responsible for a respectable amount of Mexico’s imports. Other countries around the world will be impacted by this. Elevated inflation expectations have induced universal alarm among investors, producing a bond sell-off (specifically for fixed-income treasury bonds whose profit gets consumed with a higher inflation rate.) The selling of bonds has caused a fall in bond prices. Bond yields on the other hand have risen.

A great number of studies further identified several factors which particularly concerns market capitalisation, effective of stock market, etc., which explains the dynamic forces of stocks returns during the earnings announcements date in an organised manner. For instance, Atiase (1985) found that unexpected information pass on to the market by actual earnings report is inversely correlated to the company’s capitalisation. Grant (1990) observed that the market in which a company’s securities are traded often determined the behaviour of stocks return around the earnings announcements. Several other studies have aimed to organise for synchronise factors by using time series data such as intra-day and daily data. However, a fairly number of more robust studies has examined the information content of macroeconomics news releases. Elsharkawy and Garrod (1996), Pope and Inyangete (1992).

The second and chief objective is to assess the impact of the crisis on the foreign exchange and stock markets. The report answers why the crisis adversely affected the Latin American market indices while the US market indices continued to rise.

Foreign exchange rates and International trade are important aspects of economics. The United States macroeconomy’s health is determined by these concepts and their factors.

Understanding the fact, that falling commodity prices and rising dollar cannot last indefinitely, and maybe even bottomed out for now, I see a lot of perspectives within these markets in one year period. Moreover, a lot of forecasters expect inflation to move toward two percent goal during this year, which will result in substantial rise in commodity prices. Although, it is a controversial issue according to the FED projections for the current and the next year, which have been lowered from previous numbers (Table#1).

BHP Billiton is the world’s top producers of major commodities. China, as BHP Billiton’s largest export market, demand strongly influences the BHP Billiton’s operation (Western Australian Iron Ore Industry Profile 2015). According to the annual report of BHP Billiton (2015), China brought about 36.6% revenue in the amount of total export revenue for BHP Billiton, among the largest product is Iron Ore, which was 66% in 2015. Meanwhile, the forecast of iron ore will continue to increase production. However, Chinese steel consumption may growth slow next few years (shows in figure 1) because the real estate industry decline (Mark 2015). Therefore, oversupply and weaker demand may create the fluctuations in commodity prices which related to commodity risk.

In the past 2 years, the global economy experienced the U.S. dollar increased against other major currencies and oil prices continue its freefall, amongst many other macroeconomic events. Conventional wisdom, which proved to be true, suggests the health of the U.S. dollar has an inverse relationship on the price of imports and in this case a strong U.S. dollar decreases the price of imports. However a breakdown of import prices for consumer discretionary goods tend not to move with changes in the U.S. dollar as foreign firms choose to keep maintain their prices in the U.S. market. Instead, the connection between import prices and the U.S. dollar is reflected by the tendency for commodity prices to fall when the dollar strengthens. As we know, the commodity markets is quoted in U.S. dollars, so it may seem intuitive that when the dollar increase, commodity prices will decrease. Simply, a stronger U.S. dollar directly impacts U.S. inflation which is channeled through falling commodity prices than cheaper consumer goods. Therefore a key factor to consider in anticipating how inflation will be affected by a stronger dollar is the behavior of commodity prices.

Copper mining became extremely popular in 1843 in what is now known as the Copper County. Here was on the only place in the whole United States of America to get pure, native copper, that was until the early 1900s. The first documented reports of copper being found in Michigan was in 1667 by Claude Allouez, a missionary from France. In Allouez's report, the Native Americans in the Lake Superior area, known as the Chippewa's, really valued the copper nuggets they found there. The Upper Peninsula was soon to erupt into the center for the mining industry (Molloy, 1999).

Further, the report will discuss commodity price in the industry and arguments for and against supply, demand and price shifts. Future forecasts and sustainability of the product will be discussed by use of graphs and tables. Finally, recommendations and a conclusion based on the above analysis will be made about the commodity.

In the international foreign exchange market, the Canadian dollar, Australian and New Zealand are collectively referred to as resources currency (Issa, Lafrance & Murray, 2006). The reason for this is that the currency exchange rate changes are greatly influenced by the international commodity prices. Canada is humongous, sparsely populated and rich in oil, minerals, timber and Marine resources. Formed by Canada's export trade, agriculture, forest and energy products. Energy and raw material prices will make Canadian dollar. In a long run, people generally believe that Canada economy is vulnerable to external shocks. The influence of the export trade is influenced by international commodity price fluctuations. Canada international trade relies highly on the United States. However, due to the proper macroeconomic policy applied, Canada can always successfully resist the external economic shocks, which display the strong toughness. The economic

This paper analyzes the published article report on the United States economic position based on the consumer price index (CPI) and gross domestic product (GDP) of the American footprint. The article however does state there are negative effects of the King Dollar – Low energy rate economy, yet it signifies there is major gain to the American economy based on the high dollar effect or value of currency. Some of the negative effects are to include depreciation of natural resources and high energy costs in production. In adverse, a few positive effects of the High Dollar – low energy ratio are to include a gain of profit and room for innovation to later encompass the ability to produce more job establishments and opportunities.

Regarding inflation, as I mentioned earlier, the recent effects of lower prices for crude oil and for imports on overall inflation are expected to wane during this year. Combined with further tightening in labor and product markets, I expect inflation will move toward the FOMC's 2 percent objective over the next few years. Importantly, a number of different surveys indicate that longer-term inflation expectations have remained stable even as recent readings on inflation have fallen. If inflation expectations had not remained stable, I would be more concerned

However, this review is expected to shed light on the most important controversies researchers faced in relation to intertemporal price relationships, and summarizes the answers they have given. In this chapter, a selection of studies and articles on the subjects of stationarity, unit roots and bubbles, hedging and decision-making and behavioural economics are also discussed. These are more loosely connected to the broad topics of intertemporal price relationships and commodity storage, but are closely related to the study. The chapter is concluded with a summary of observations about the development of intertemporal price relationships and the driving forces behind, approaching from a practical, grain industry focussed