Key Macroeconomic Indicators for Base Metal Prices (2017-3-10)

SHANGHAI, Mar. 10 (SMM) – Eyes should be on US’s February nonfarm payroll report, unemployment data and salary growth on Friday. Base metals kept falling on Thursday’s night trading but tended to stop dropping will stage a technical correction on Friday after continuous decline.

SMM Price Outlook for Base Metals on SHFE (Mar. 10, 2017)

Market players will eye on US’s February nonfarm payroll report on Friday, which determines if Federal Reserve will raise rate in March. The data is expected to drop on a monthly basis, but unemployment data will also decline, counteracting negative effect from the falling nonfarm payrolls. Effect from salary growth will be no less than that of nonfarm payroll report. If salary growth increases sharply both on monthly and yearly basis as market expected, Fed will raise interest rate at March’s meeting although nonfarm payrolls falls to 200,000 in February. Fed Chairwoman Yellen once indicated that a 125,000 of newly nonfarm payrolls in a month can ensure US’s labor market to develop stably.

However, according to rising ADP employment in February, there is a possibility for nonfarm payrolls to keep increasing in February. Then, it will be certain on US’s rate hike. As the news has been digested, it will make limited effect on commodities.