Key Macroeconomic Indicators for Base Metal Prices (2017-6-15)

SHANGHAI, Jun. 15 (SMM) –Market will eye US initial jobless claims for last week, New York and Philadelphia Fed manufacturing index for June and US import & export price index for May on Thursday. Market will continue digesting the US Fed’s policy decision during June meeting and closely watch the BOE’s policy decision.  

As expected, the US Fed decided to raise interest rate by 25 basis points and is optimistic that the US economy will see mild growth this year and labor market will grow steadily as well. The US Fed also admits inflation indicator fell and will closely watch developments of inflation level. The US Fed hinted that it will begin cutting balance sheet this year. The US dollar rose sharply after the policy decision.  

US Fed Chair Yellen’s speech was more hawkish than expected. She said the US Fed may begin cutting balance sheet early if development of US economy meets expectations. She added that gradual rate hike is guaranteed and said market should not overreact to certain inflation data.  

The BOE will release policy decision today. Result of general election in the UK earlier this month added to uncertainty over political outlook in the country. UK wage data released overnight remained sluggish. As such, the BOE may keep monetary policy unchanged.  

US economic data to be released today may be mixed. Annual rate of import price index may fall back in May, suggesting weakening inflation. Durable goods orders fell in April, reflecting a cool-down in manufacturing sector. New York and Philadelphia Fed manufacturing index for June and US industrial output for May will be released today. If these data continue falling, it will be seen as evidence of weakening manufacturing sector, which will put downward pressure on the US dollar.  

See SMM price forecast, please click: SMM Price Outlook for Base Metals on SHFE (Jun. 15, 2017)