Key Macroeconomic Indicators for Base Metal Prices (2017-2-3)

SHANGHAI, Feb. 3 (SMM) – Attention should be on a series of data on Friday, the first trading day after 2017 Chinese New Year holiday, including China’s Caixin manufacturing PMI in January, US’s nonfarm payroll report in January, unemployment rate, salary growth and labor force participation rate. In other news, Chicago Federal Reserve Chairman will deliver a speech on Friday.

During 2017 Chinese New Year holiday, US dollar index dropped below 100, sending crude oil and precious metals up. Base metals on LME market underperformed other commodities and were divergent. LME nickel outperformed other metals and increased for 5 days in a row. Base metals on SHFE market will remain mixed on Friday.

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China’s official manufacturing PMI released during the holiday was 51.3. Although the data was lower than previous data of 51.4, it was higher than expectation of 51.2. Manufacturing PMI fell due to 2017 Chinese New Year holiday while new export orders increased. Caixin manufacturing PMI will decline slightly to 51.8.  

US’s ADP employment increased sharply in January and ISM manufacturing was higher than expectation. Markit manufacturing PMI hit the highest since September 2014 in January 2017. US’s initial jobless claim issued on Thursday fell below 250,000 from the week ending January 26, which was much higher than expectation and previous data. US’s nonfarm payroll report is expected to increase. But any growth of US dollar index will be limited by negative technical indicators and Trump’s comment on US dollar.