SHANGHAI, May 19 (SMM) – Germany annualized April PPI, eurozone flash May CCI and Baker Hughes’ oil rig count will be released today. Base metals mostly fell initially before rising, with average price lower, meaning short momentum dominated the market. Base metals are expected to continue diverging today.
Germany April CPI rose 2% YoY, and eurozone annualized April CPI increased to 1.9%, showing optimistic outlook for eurozone and Germany inflation. This bode well for Germany’s April CPI, which may continue rising or remain in line with market expectations. European Central Bank Chair Mario Draghi’s confirmed stronger inflation in his previous statement. Improvement in eurozone economy may boost eurozone CCI in May.
Baker Hughes’ oil rig count increased to 712 for the week ending May 12, up 0 on a weekly basis, and rising for 17 weeks in a row. This situation showed no sign of changing, and may increase turmoil in the oil market.
Market players reckon increased rig count in the US will constrain oil price gains even if OPEC countries prolong oil cut agreement.
EIA also reported US oil output growth will restrict oil price gains before late 2018. EIA predicts US daily oil output will reach 9.31 million barrels in 2017, up 440,000 barrels from 2016’s 8.87 million barrels.
Saint Louis Fed Chair James Bullard’s statement on US economy and monetary policy will be also a focus of markets. He said demand for safe assets remains strong for the US Fed. When combined with slow growth in labor and labor productivity, it is unnecessary to raise interest rate immediately.