SHANGHAI, Mar. 16 (SMM) –Positive news came out of the euro zone Thursday that Greece won further bailout package, while the US economy continues to recover. Risk appetites in financial markets thus are heightening, boosting base metals.
According to data released by the US Labor Department March 15, the US initial jobless claims fell to a seasonally adjusted 351,000 last week, lower than the expected 356,000. The NY Empire State Manufacturing Index rose to the highest in March since June 2010, indicating good momentum in the US manufacturing sector. The US Producer Price Index (PPI) for February increased 0.4% after seasonal adjustments, below the projected 0.5%, while core PPI rose 0.2% in February, in line with market expectations. Combined with the fact the Federal Reserve raised the US economic outlook March 13, investor speculations about the third quantitative easing are abating. However, the above mentioned figures prove that the US economy is recovering. Optimism overnight caused the US dollar to fall across the board, but helped the US and European stock markets generally keep firm. The Dow Jones Industrial Average surged 58.66 points or 0.44% to 13,252.76, the Nasdaq Composite Index rose 15.64 points or 0.51% to 3,056.37, and the Standard & Poor's 500 Index increased 8.32 points or 0.60% to 1402.60.
Positive news in Europe helped alleviate a chaotic Greek default. The Standard & Poor's confirmed Greece's credit rating March 15, saying it was positive towards the country's outlook following the Greek debt swap deal. Meanwhile, the International Monetary Fund (IMF) approved Greek bailout package worth EUR 28 billion, meaning Greece can immediately get EUR 1.65 billion loans. Market confidence stabilized further as a result. Base metals prices rallied stably Thursday following recent slight drops. Base metals declines in the previous days are basically considered adjustments of increasing prices. Crude oil prices are also increasing, lifting commodity markets and providing buying opportunities for investors. As such, SMM believes that, should economic data continue to improve, base metals prices will extend gains.