Key Macroeconomic Indicators for Base Metal Prices (2017-2-22)

SHANGHAI, Feb. 22 (SMM) – Attention should be on US’s January existing home sales, eurozone’s January annual CPI and German February IFO business climate index on Wednesday. Base metals dropped on Tuesday’s night trading after market speculating sentiment subsided. This, combined with strengthening expectation over US’s rate hike in March’s meeting, will send US dollar index up, weighing down base metals. Eyes should be on support of base metals, if the prices drop below the support, those will drop further.

SMM Price Outlook for Base Metals on SHFE (Feb. 22, 2017)

US’s January existing home sales is expected to be positive with positive real estate market and market expectation. According to Harvard’s report, US’s vacancy rate declined continually in 2016. This, together with tightening inventory, will push housing prices up. US’s operating rate of single family fell in 2016 and 30-year mortgage loan rate remained at reasonable range. Moreover, US Federal Reserve will raise rate for many times in 2017 and labor market is close to full employment. Those strengthen expectation over house consumption in US.

Eurozone’s January CPI will increase higher than expected on an annual basis. Inflation of eurozone and its counties remained in rising territory from 2016. Although France’s January CPI released on Tuesday missed market expectation, it increased for 9 months in a row and hit the highest from February 2016.