SHANGHAI, Dec. 19 (SMM) – At the end of year, western markets closed for Christmas, which may lead to quiet trading. China’s market dominates by the Central Economic Working Conference. Base metals are expected to keep fluctuating.
China’s Central Economic Working Conference came to an end last Friday. The conference concluded that the economy was featured by seeking progress while maintaining stability in 2016 and summarized major contents of economic works in 2017 as deepening supply-side structural reform. Specifically, that is to lower overcapacity, reduce inventory, deleveraging, cost reduction and improve weak areas of the economy. Overcapacity reduction is to cut capacity surplus in steel and coal sectors. Hence, rising strength for commodities, which was seen in 2016, will continue in 2017.
US’s interest rate hike kept affecting market, in addition to factor of Christmas. US Federal Reserve Chairwoman Yellen will deliver a speech on Tuesday and will talk about labor market. Market players hope to search for more clues about Fed’s interest rate-hiking path in the future and Yellen’s opinion on Trump’s fiscal policy. Fed officials assumed economic stimulation from Trump’s tax reduction and infrastructure investment last week and Yellen indicated at press conference after FOMC meeting that there are many uncertainties over economic policies and its effects on US’s economy.
Eyes should be also on Bank of Japan (BOJ)’s last monetary policy meeting in 2016 this week. One foreign media reported that US Fed announced to hike rate in December and European Central Bank also said to cut monthly debt purchase next April. So, BOJ, one of the global largest banks who prefer easing monetary policy, is expected to tighten monetary policy for the first time since 2007. Attention should be on BOJ’s rate decision in December’s meeting and its President Haruhiko Kuroda’s speech this Tuesday.
Overall, there are mixed factors this week and base metals are predicted to swing widely.