SHANGHAI, Sept. 13 (SMM) -- US President Barack Obama announced a new job stimulus plan after US financial markets closed on Thursday, with plans to inject a total of USD 447 billion directly and indirectly into the US market. Although this amount exceeded the USD 300 billion mentioned in media reports, financial markets did not overreact since the plan still needs approval from the US Congress. Given recent debates in the US Congress over the debt ceiling, the adoption of the job stimulus plan is not certain.
No substantial progress was made on the Greece bailout plan. In addition, economic data from Europe suggests economic conditions in the Euro Zone and the UK are deteriorating, which will exacerbate the European debt crisis. The European Central Bank decided to keep interest rate unchanged at 1.5%, which fell in line with market
According to data from National Bureau of Statistics (NBS), China’s August CPI was 6.2% YoY, with food prices up 13.4%, and compared to China’s August PPI of 7.1% YoY. The decline in CPI was within market expectations, but current inflationary pressure is still relatively high. It is still too early to say if China’s CPI has peaked and will begin falling in the next few months.
Upward momentum for base metal prices is relatively weak due to the slowing global economic recovery. Any negative news will further dampen market sentiment, and in this context, base metal prices will continue to fluctuate.
LME nickel inventories have fallen sharply lately, with total inventories falling to their lowest level since February 2009. In addition, cancelled warrants have recently surged, suggesting relatively strong buying activity in the market, but LME nickel prices met relatively strong resistance at USD 22,000/mt, dampening any further price increases. At present, LME nickel prices are finding support at USD 21,600/mt and resistance at USD 22,000/mt. If prices break through this resistance level, LME nickel prices should continue to move higher.