SHANGHAI, Jan. 6 (SMM) – Eyes should be on US nonfarm payroll report in December, unemployment rate and salary growth on Friday, and any change will make effect on foreign exchange market, affecting market’s sentiment in base metal market. Although US dollar index kept falling on Thursday night, most base metals both on SHFE and LME markets dropped after meeting resistance from the moving averages. Base metals are expected to keep performing mixed on Friday.
Base Metals to Remain Weak, SMM Says
US’s nonfarm payroll report will increase 180,000 in December after seasonal adjustment and unemployment will expand to 4.7%. Average hourly salary will rise 0.3% MoM and 2.8% YoY in December. If the economic data improve as expected, expectation over US’s rate hike will strengthen again, supporting US dollar index. But on the contrary, it will weigh down US dollar index.
US Fed Chairwoman Yellen indicated in mid-December that employment improved according to data, the highest in recent 10 years, and salary also increased, a sign of positive economy growth. Yellen also pointed out that it doesn’t need more fiscal expansion to realize full employment as unemployment dropped and inflation increased. But there were signs of disagreement in market. One Brown Brothers Harriman analyst indicated that seven of 10 growths of December nonfarm payroll report in previous 10 years were lower than November’s level and the December figures in recent three years were all lower than November’s level. So, there is a possible decline in nonfarm payroll report in December.
