SHANGHAI, Jan. 23 (SMM) -- LME nickel LME nickel for delivery in three months opened at USD 17,425/mt and settled at USD 17,492/mt overnight, up USD 62/mt from a day earlier, with the intraday high at USD 17,550 mt and the low at USD 17,322/mt. Daily trading volumes were 2,397 lots, up 1148 lots. Positions were 109,307 lots, down 1,149 lots. LME nickel inventories were 148,128 mt, up 108 mt.
During the morning Asian trading hours, Japan’s central bank announced to keep interest rate unchanged and set target to keep inflation under 2%. Meanwhile, it decided to pushed YEN 13 trillion of financial assets per month and set no deadline. Affected by Japan’s loose monetary policy, base metal prices slightly advanced, with LME nickel prices slightly fluctuating around USD 17,500/mt. During the European trading hours, oversubscription rate of Spanish 3-month government bond, 6-month -month government bond was 4.18 and 3.85, both better than previous 2.92 and 2.57. In addition, demand for 10-year government bond was strong and exceeded EUR 24 billion. However, the US existing housing sales for December were disappointing, offsetting bullish sentiment. LME nickel prices later pared certain losses and only closed at USD 17,492/mt, up USD 62/mt from a day earlier.
Japan’s central bank announced to keep interest rate unchanged and set target to keep inflation under 2% on Tuesday. Meanwhile, it decided to pushed YEN 13 trillion of financial assets per month and set no deadline. In Spain, the subscription for Spanish 10-year bond hit historical high at EUR 24 billion.
With regard to economic data, the NAR announced on Tuesday that the US existing housing sales for December was 4.94 million units, lower than 5.1 million units expected, and down 1.0%. However, the US existing housing inventory was only 1.82 million units, the lowest since 2001. The US home values for 2012 rose by 5.9%, the largest gain since 2006. As of 4Q 2012, The US housing prices have been advancing four fifth consecutive quarter, suggesting that the US housing market is recovering. Germany ZEW economic sentiment index for January rose by 31.5, the highest since May 2010 and better than 12.0 expected and previous reading of 6.9. The US Richmond Fed Manufacturing Index for January was -12, sharply down from 5 recorded a month earlier.
In China, China’s central bank injected RMB 43 billion liquidity through 7-day reverse purchase on January 22nd, with bidding rate flat at 3.35%. This week’s reverse purchase totaled RMB 150 billion. Market expects that the central bank will increase liquidity injection before China’s New Year holiday.
The US States House of Representatives will vote on Wednesday on temporary extension to the debt ceiling, which will affect base metal price movement. SMM expects that LME nickel prices will move between RMB 17,300-17,600/mt and Shanghai nickel spot prices will move between RMB 123,000-124,500/mt on Wednesday.