Key Macroeconomic Indicators for Base Metal Prices (2017-3-9)

SHANGHAI, Mar. 9 (SMM) – Eyes should be on China’s February CPI, social financing, M2 growth, US’s challenger layoffs and initial jobless claim from the week ending March 3 on Thursday. European Central Bank (ECB) will release rate decision. Expectation over US’s rate hike strengthened on Wednesday’s night trading, sending US dollar index up. Base metals performed mixed and will remain divergent on Thursday.

China’s CPI rose sharply in January due largely to 2016’s carryover effect, 2017 Chinese New Year holiday and rising food prices. However, CPI growth will drop to 1.7% YoY in February with the end of the holiday, high base and falling food prices. PPI is expected to keep rising in February thanks to increasing commodity prices and low base.

SMM Price Outlook for Base Metals on SHFE (Mar. 9, 2017)

US’s initial jobless claim will be in normal range from the week ending March 3. As CPI increases gradually, US’s IPI will keep rising in February.

ECB will release rate decision on Thursday. Most economists expect ECB to hold monetary policy unchanged in a short term but were divergent on Draghi’s forward guidance on QE and interest rate. Most institutions not expect ECB to change its forward guidance in a short term but to tighten gradually in the future. Besides, Europe’s politics and presidential election in major countries will also affect ECB’s decision.