SHANGHAI, Sept. 1 (SMM) – Diverging trend will strengthen on base metal market on Thursday with eyes on manufacturing PMI for August from China and the US and US July construction spending.
Volatility to Grow in Base Metals, SMM Says
Overnight, US August ADP employment data was upbeat, raising bets for a rate hike by US Fed while market kept cautious attitudes towards the possibility of a rate hike in September.
The mixed reading of China’s official and Caixin manufacturing PMI in July boosted confusion in market. Markets expect the official manufacturing PMI to be positive in August and the figure in July may be negatively affected by floods but the poor reading of it reflected poor demand both at home and abroad.
The recently released Dallas Fed manufacturing index unexpected fell back in August, remaining in constriction territory for 20 months in a row. Employment index was also negative. This, coupled with US poor flash manufacturing PMI in August and falling sub-indexes, will raise uncertainties about a rate hike by US Fed.
The flash manufacturing PMI from euro zone fell 0.2 to a 3-month low in August with declines in order, employment and finished product inventory sub-indexes. This triggered doubts about recovery in euro-zone economy. Should the final reading of the figure be negative, market expectation for fresh stimulus by ECB will grow.
