SHANGHAI, Sept. 2 (SMM) – Chinese yuan has gained for 5 consecutive days after slumping on Aug. 11, easing expectation for further depreciation in yuan. But concerns over China’s economy slowdown and volatile crude oil prices plagued investors again.
The onshore RMB against the USD finished up 0.19% to RMB 6.36 on Tuesday, the highest since Aug. 11. Most investors believed that with support from China pro-growth measures, there is no basis for continued depreciation of the yuan. This means that the high SMM/LME lead price ratio will not persist. China’s official PMI for Aug. recorded a fresh low of 49.2 since Aug. 2012 and Caixin manufacturing PMI dropped 0.3 percentage points MoM to 49.7% in Aug.
US ISM manufacturing index stood at 51.1 in Aug., the lowest since May 2013. Final reading of Aug.’s Markit manufacturing PMI came in at 53. US manufacturing industrial has been negatively affected by strong dollar and volatile global economy. Jul.’s construction expenditure increased to USD 1.08 trillion, its highest since May, 2008. US dollar index ended down 0.685
The final reading of Germany manufacturing PMI for Aug. hit a 16-month high of 53.3. Unemployment rate in euro zone recorded 10.9% in July, a new low since 2012. This may support economy recovery latter. Italy's final 2015 first-quarter GDP reading showed the economy rose at a rate of 0.3% quarter-on-quarter, topping forecast of 0.2%. The euro was thus favored, depressing dollar.
Crude oil slumped 8% following a 3-day jump of 27%. Spot gold rose to a session high of USD 1,147.16/Oz and was up 0.6% at USD 1,140.5/Oz. LME base metals were mixed.
