SHANGHAI, Jul. 22 (SMM) - Base metals prices will continue to experience corrections in the near future as long as manufacturing PMIs worldwide do not deteriorate.
The market is absorbing news released last week's end.
China's central bank announced it would eliminate restrictions of loan interest rates for financial institutions staring July 20, including canceling the 0.7 time minimum limit for loan interest rate, eliminating discount rate regulations and the 2.3 times ceiling of rural credit cooperative loan interest rates. Although this will trigger expectations over additional stimulus policies, the market will be barely boosted given slowing economic growth.
The G20 meeting held last Friday hinted US Federal Reserve will taper off QE3 sooner than later. G20 joint statement pointed out although downturn risk of economy weakened compared to last year, economic growth in many of the G20 countries lacked momentum to boost employment.
Japan's ruling coalition led by Shinzo Abe won a majority of seats in the upper house of parliament in Sunday's election, which will gives his party a stronger mandate to implement reforms aimed at invigorating the country's economy and a stronger control over both houses of parliament. Easing policies of JPY will help stabilize base metal prices.