[Base Metal]Key Macroeconomic Indicators for Base Metal Prices (2015-8-4)

SHANGHAI, Aug. 4 (SMM) – US ISM manufacturing index for July came in at 52.7, below the expected 53.5 and hitting a fresh low since April. June’s personal consumption expenditure grew 0.2% MoM, in line with forecast but falling demand for auto caused the number to hit a four-month low. The Commonwealth of Puerto Rico failed to pay USD 58 million on Monday, the first default of a U.S. state, or state-like entity.  

The Athens stock exchange in Greece tumbled as much as 23% Monday morning after resuming trading following a five-week closure. The country’s four main banks, including the National Bank of Greece, were down by around 30%, the daily limit, mainly because of cash shortage. Standard & Poor's Ratings Services cut EU’s outlook from stable to negative but left EU’s AA+ credit unchanged. S&P noted that there is 1/3 possibility of EU’s credit change in the following two years mainly due to negative influence from Greek debt crisis and a possible UK exit.

Crude oil prices slumped. US crude oil prices plunged more than 4% to fall below USD 45/bbl, the lowest since March. Brent oil prices posted a drop of 4.6% and slipped below USD 50/bbl for the first time since January. The OPEC’s oil output in July hit a recent-year high and its members insisted to maintain maker shares instead of raising oil prices. Any lifting of sanctions could lead to an increase in Iranian oil production of 500,000 bbl per day and the sanction is expected to be lifted in November this year.

Caixin’s PMI for China in July, released Monday evening, fell to a two-year low of 47.8, lower than June’s 49.4 and expected 48.3. The PBOC added lending to banks through PSL and MLF in July with the growth in PSL falling over 70% from June. The PBOC gained over RMB 100 billion via MLF, mirroring a cut in investment.

Chinese regulators restricted short selling of stocks, freezing out day traders, in their latest step aimed at stabilizing the world’s second-largest equity market. Under the old T+0 rule, “you can go short in the morning and cover your shorts before market close the same day and lock in your profit, if your bet is right,” Xian Liang, a San Antonio, Texas-based portfolio manager at U.S. Global Investors Inc., said in an e-mail. “Now with T+1, you can’t cover your short position in the same day, and have to wait till next day at the earliest. This new rule should discourage speculative short sellers -- day traders -- and help mitigate intraday volatility.”

US dollar index grew 0.3% but US stocks all dropped. Major European stocks increased expect Greek stocks. LME base metals all slipped.