Key Macroeconomic Indicators for Base Metal Prices (2016-6-27)

SHANGHAI, Jun. 27 (SMM) – Markets will continue digesting the influence of UK’s exit from EU this week with eyes on the Bank of England (BoE)’s meeting result due for Tuesday and manufacturing PMI from Europe and UK for June.

Article 50 of the Lisbon treaty says: “Any member state may decide to withdraw from Europe Union in accordance with its own constitutional requirements.” It specifies that a leaver should notify the European council of its intention, negotiate a deal on its withdrawal and establish legal grounds for a future relationship with the EU. However, after British people voted to leave EU, the plunge in pound and the resignation of British Prime Minister triggered doubts as to whether UK should leave EU.

Markets expect the BoE to employ looser policies to offset negative effect from UK’s exit from EU. Thus, the BoE may cut interest rates and expand the size of the purchase debt at the monetary policy committee meeting due for Tuesday.

Global central bank forum will be held from June 27-29, which will be convened by the ECB. Attention should be also turning to manufacturing PMI from China, Europe, US and Japan for June. Chinese economy should stay weak. Compared with manufacturing PMI from UK and Europe in latest two years, we can find downturn in UK’s manufacturing industry and stabilizing of Europe’s manufacturing industry.