Key Macroeconomic Indicators for Base Metal Prices (2016-10-13)

SHANGHAI, Oct. 13 (SMM) –Market will digest minutes of the US Fed’s September meeting today, and closely watch US crude oil stocks as well as China September foreign trade data. 

China’s foreign trade data in September will not be as positive as in August, citing still slow global economic recovery. New export order sub-indexes under China official manufacturing PMI and that released by Caixin for September both rose. Chinese yuan is still depreciating. This means China’s exports will not weaken significantly in September.    

New order sub-index under China September official manufacturing PMI, though down from August, was the second highest in nearly five months. Import sub-index hit this year’s high. Given low base last year, China’s imports are unlikely to fall sharply in September.  

Recent US employment data have been negative. If US initial jobless claims to be released tonight rise, uncertainty will grow over rate hike in December.  

Minutes of the US Fed’s September meeting showed US Fed officials are divided over labor market and inflation. Several US Fed officials pointed out downward risks overseas, while most US Fed officials understand that inflation is rising slowly.  

The US dollar index swung widely following release of the minutes, which sent slightly neutral tone overall.  

API US crude oil stocks and gasoline stocks both grew more than expected last week. But, US crude oil futures prices for November delivery fell only slightly as crude oil stocks in Cushing fell slightly. EIA crude oil stocks and monthly energy outlook report will be released later today.  

See SMM price forecast, please click: Base Metals to Continue Diverging, SMM Says