Key Macroeconomic Indicators for Base Metal Prices (2015-7-2)

SHANGHAI, Jul. 2 (SMM) – Major macroeconomic news released overnight was positive as a whole, with base metals prices rising despite a stronger US dollar index.

US major economic indicators released overnight were upbeat. Construction spending in May was up 0.8% MoM, and seasonally adjusted annualized construction spending was USD 1.04 trillion. ISM manufacturing index in June rose from 52.8 in May to 53.5, hitting a five-month high. Employment index increased 3.8 to 55.5, and new orders index climbed from 55.8 to 56.0. ADP data show US private sector added 237,000 jobs in June, and revised the number of employment upwardly from 201,000 to 203,000. This allowed the US dollar index to rise to 96.

China’s official PMI in June was 50.2, level with May and its highest since November last year. HSBC’s June PMI for China was 49.6. PMI for large companies was 50.8%, up 0.1% MoM. Mid-sized enterprises’ PMI was 50.2%, down 0.2% MoM, though. PMI for small enterprises was 47.5%, down 0.4% MoM, and with the decline expanding for the second straight month. Besides, the employment sub-indice for the HSBC’s June PMI for China fell to 46.6, its lowest in the last six years, meaning great pressure for the recovery in the manufacturing. This constrained base metal price gains.

Economic data from Europe were downbeat, though Greek crisis appeared to ease. A majority of Greeks would vote 'No' to the terms of a proposed bailout deal by foreign lenders but the lead narrowed significantly after banks were closed this week, according to an opinion poll published on Wednesday. It was also reported Greek Prime Minister plans to accept most of conditions for bailout, allowing Greek crisis to ease and helping alleviate risk aversion.

Crude oil prices plunged 4.22% on unexpectedly growth in inventories. China’s stocks tumbled, with additional stimulus measures announced in the evening. Precious metals prices pulled down. LME base metals prices all climbed.