CTA selling activity in Copper and Aluminum is likely to weigh on these metals, reflecting the downside asymmetry in algo flows resulting from range-bound price action, TDS' Senior Commodity Strategist Daniel Ghali notes.

CTAs to sell +16% and +10% of their max size in Copper and Aluminium

"Ultimately, this trading regime is akin to time-decay for trend signals, resulting in more frequent whipsaws as adversarial pressures build proportionally with CTA positioning."

"This session, CTAs are set to respectively sell up to +16% and +10% of their max size in Copper and Aluminium, but the scope for subsequent purchases remains elevated in aluminium, with more selling in the pipeline over the coming week, even in a flat tape scenario for prices."