Key Macroeconomic Indicators for Base Metal Prices (2017-7-27)

SHANGHAI, Jul. 27 (SMM) –China Q2 GDP was positive. Value-added at above-scale Chinese industrial enterprises rose 7.6% YoY in June, and rose 6.9% YoY during January-June, both better than expected. So, profit at above-scale Chinese industrial enterprises, to be released today, should be positive as well in June.   

Last week’s US initial jobless claims may rise, but will remain at very low level. This will have little impact on market. 

Monthly rate of US durable goods orders in May hit the lowest since last November. Unexpected decline in US durable goods orders in May will drag economic growth. Monthly rate of US durable goods orders is expected to rise MoM to 3.5% in June. This suggests US manufacturing sector may regain momentum, in line with better-than-expected Markit preliminary US manufacturing PMI for July.   

US CPI and retail sales were below forecast in June. US wholesale inventories may drop slightly in June from May. If US wholesale inventories stay high, this means US economy is sluggish in Q2.

The US Fed kept federal fund rate unchanged at 1%-1.25%, in line with forecast. As for wording about inflation, the US Fed removed “recently” and “to some extent” as for below-than-expected inflation target. The US Fed hinted normalization of balance sheet may begin relatively fast. The US Fed may announce to adjust balance sheet in September. The US Fed gave little clues for rate hike outlook.  

See SMM price forecast, please click: SMM Price Outlook for Base Metals on SHFE (Jul. 27, 2017)