Key Macroeconomic Indicators for Base Metal Prices (2017-1-3)

SHANGHAI, Jan. 3 (SMM) – Regular figures in early-month, including manufacturing PMIs and US’s nonfarm payroll report, will be released on Tuesday, the first trading day in 2017. Moreover, market summary on 2016 economy will set the tone for the first trading week in a new year. Shorts and longs are expected to invest cautiously, and base metals are expected to trade in a wide range this week.

China’s Caixin manufacturing PMI and manufacturing PMIs from other countries in December will be introduced on Tuesday and Wednesday, which will be stable as a whole, making small effect on market.

Yuan’s depreciation will keep affecting market. Market players are doubt on range and speed of yuan’s depreciation after offshore yuan hit the year’s lowest level at 6.9725 in 2016. If yuan moves below 7 in early 2017, market balance will be broke down.

Base Metals to Look for Direction, SMM Says

Attention should be on US’s nonfarm payroll report in December this week, which will not reduce unexpectedly according to the latest weekly unemployment claims. The data growth is expected to keep at around 180,000. US Federal Reserve hinted that they will fasten interest rate hike in 2017 after raising rate in December’s meeting. So, US dollar index will rally from lows with strong support at 100.

OPEC members cut output from January 1, down 1.2 million bbls per day, and non-OPEC members also agreed to cut 558,000 bbls per day on December 10, 2016. Oil increased by 20% since OPEC members reached consensus on output reduction in late November 2016. Oil’s movement will affect commodities in new year.