1. Germany’s Federal Labor Agency revealed last Thursday that Germany’s unemployment payrolls fell by 3,000 in February, beating market expectations. However, the unemployment rate was 6.9%, up slightly from the 6.8% in the previous month. Despite the uptick in the rate, the entire labor market was still positive, according to the Federal Labor Agency.
2. The defense of the Fed’s quantitative easing policies by Chairman Bernanke last Wednesday outweighed market concerns arising from uncertainties surrounding Italian election results. Bernanke pointed out that benefits from loose monetary policy outweighed risks, and that the Fed will continue existing policies until the US labor market improves.
1. The US Senate did not passed legislation needed to avoid automatic budget spending cuts, with both political parties rejecting proposals by the other. As a result, beginning on March 1st, USD 85 billion in automatic spending cuts will now be phased in over the next seven months.
2. Italian parliamentary elections produced no strong mandate, but party leaders were all reluctant to proceed with a second round. Right-wing leader Silvio Berlusconi offered to work with centre-left leader Pier Luigi Bersani, but no clear agreement was reached. Political power represented by the most recent Prime Minister Monti was too weak to influence the formation of a government, so political uncertainty remains a strong negative influence on markets.
3. US GDP for 4Q was revised upward from -0.1% to 0.1%, but still far below the 0.5% expected.
In general, news was mixed and markets did not send any clear upward signs for the short term. However, a series of economic reports to be released on Friday, especially PMI from major economies and nonfarm employment payrolls from the US, will influence markets. Technically, LME nickel prices have hit bottom and may rebound if Friday’s economic data is positive.
In the Shanghai nickel spot market, stainless steel mills were under cash flow pressure, so purchase demand for nickel was weak. Tight cash flows may ease in the coming week as a new month begins, with transactions increasing as well.