SMM Nickel Price Forecast (Jul. 9-13)

SHANGHAI, Jul. 9 (SMM) –
Positive Factors
1. The ADP National Employment Report showed employment increasing by 176,000 in June and last week's jobless claims were 374,000. In response, Goldman Sachs raised expectations for June's non-farm employment from 75,000 to 125,000.

2. The EU, IMF, and ECB will meet in Cyprus next Monday. The IMF will also send a representative to Greece in order to discuss adjustments in bailout clauses.

Negative Factors:
1. Bank of England expanded asset purchasing by GBP 50 billion to GBP 375 billion as expected. The European Central Bank lowered interest rates by 25 basis points to a record low 0.75%, and lowered the overnight deposit reserve ratio by 25 basis points to 0.0%. The ECB president said a consensus was reached on interest rates cuts, but that it would not take further measures. China's central bank unexpectedly cut interest rates for one-year loans by 31 basis points, to 6.00%, and interest rates for one-year deposit by 25 basis points, to 3.00%. It also lowered the low-end of the fluctuation range from 0.8 times interest rates, to 0.7 times, the second interest rate cut since June 7th.
Interest rate cuts are positive for markets in the short term, but worldwide interest rate cuts and easing monetary policies are signals that a global recession is possible.

2. A series of manufacturing data released last week reflected the current sluggish global economy and no factors are seen which will improve the situation in the short-term.
In general, LME nickel prices should remain weak until new policy announcements are absorbed by markets. If US non-farm employment increases significantly, market confidence will improve.