Key Macroeconomic Indicators for Base Metal Prices (2015-8-17)

SHANGHAI, Aug. 17 (SMM) – The flash data of US’ University of Michigan’s CCI for August came in at 92.9, missing forecast and its second lowest level since November 2014. The initial value of the one-year-ahead expected inflation stood at 2.8%, on par with July’s. The five-year-ahead expected inflation was 2.7%, slightly below July’s 2.8%. July’s industrial output rose 0.6% MoM, its second growth in two month. July’s PPI beat estimate and increased 0.2% from June. Economic indicators from US were mixed. The falling consumption may keep inflation at lows and August’s PPI may be depressed by the drop in commodity prices. US dollar thus hovered at highs.

In eurozone, Q2’s GDP was up 0.3% QoQ while German’s GDP for Q2 rose 0.4% from Q1, both below expectation. July’s CPI for euro zone increased 0.2% YoY, in line with June’s and expected. The eurozone approved a new bailout loan of EUR 86 billion ($96 billion) for Greece in the flowing three years. But IMF required the EU to reduce debt for Greece. And only EU releases measures relevant to debt relief, will IMF make decision whether to provide loan to Greece, one represent of IMF expressed. Inflation stayed low in eurozone and economy development slowed. Also, Greece debt crisis lingered. Thus, outlook for eurozone is not upbeat.

Exchange rate of Chinese yuan stabilized after a continuous drop last Friday. Funds outstanding for foreign exchange posted a large decline in July while public finance-cash in bank jumped almost four times from June. Economic slowdown and slipping funds outstanding for foreign exchange may boost China’s another cut in reserve requirement ratio.

US crude oil active rigs grew two to 672 last week, the highest since April 2015. US government announced it will approve the proposal of oil trading between US and Mexico. Should this turn out to be true, US’s 40-year ban of crude oil export will be broke, which will worsen the global oil oversupply. Crude oil prices will thus be weighed.

US dollar index posted a rise of 0.2% while euro dropped 0.38%. US stocks jumped but European stocks diverged. LME base metals all increased expect copper.