SHANGHAI, Aug. 26 (SMM) – The London Metal Exchange was closed on Monday for the Summer Bank Holiday.
Lead for October delivery, the most active contract on the Shanghai Futures Exchange, started Monday’s night session at RMB 14,485/mt, and then hovered between RMB 14,470-14,540/mt. The price of the soft metal closed down RMB 90/mt at RMB 14,485/mt, with trading volumes at 4,426 lots and positions up 260 lots at 28,372 lots.
US new home sales fell unexpectedly in July to a refreshed 4-month low, down for a second consecutive month. The home sales dwindled 2.4% MoM in July, far short of expectations for a 5.8% MoM rise. The nation’s new home inventories rose in July to the highest since August 2010. The preliminary US service PMI for August came in at 58.5, above the estimated 58.0 but shy of July’s reading of 60.8. The service index in July recorded the biggest drop in six months. Despite these dispiriting economic reports, the Standard & Poor’s 500 Index succeeded in breaking through the 2,000 mark, helping lift investor sentiment.
German IFO business climate index was reported at 106.3 in August, missing expectations and hitting a renewed low since July 2013. Germany, the biggest economy in the euro zone, saw its business confidence index down for a fourth straight month, indicating the stagnant economy in the euro area. European Central Bank President Mario Draghi said that the ECB is likely to inject liquidity to stimulate the economy amid low inflation. Thus, market participants now have higher expectations for the ECB to unveil the quantitative easing (QE), which helped European stock indices rise.
The US dollar index edged up 0.28%, while the euro eased 0.38% over the greenback, hitting a new 11-month low. Major European and US stocks closed up.
Major world stocks rose on Monday in the face of relatively weak European and US economic data, in a sign of bullish sentiment among investors. LME lead is expected to fluctuate between USD 2,250-2,270/mt, and the most active SHFE 1410 lead contract is set to hover between RMB 14,450-14,550/mt. In China’s physical lead markets, traded prices should be in a RMB 14,250-14,400/mt band on Tuesday.