Key Macroeconomic Indicators for Base Metal Prices (2017-7-21)

SHANGHAI, Jul. 21 (SMM) – The market will lack solid macroeconomic news today. Canada’s June CPI and May retail sales will be released today. The US dollar slumped overnight after Mario Draghi’s hawkish statement, dipping to 9. The US dollar may continue falling in the near term unless there are positive news. LME and SHFE base metals experienced volatility recently. SHFE base metals fell across the board, and LME base metals were mixed, with divergence expected to continue.

Canada’s May retail sales are expected to fall 0.3%. Canada’s June CPI is also expected to fall to 1.1%. Whether the US dollar will rebound will hinge on other currencies. If Canada’s economic indicators turn out to be in line with market expectations, the US dollar will take a hit. But if these data are upbeat, it means Canadian economy is recovering, strengthening CAD and in turn weakening the US dollar.

Recent survey shows the United States Federal Reserve Board will announce a USD 4 trillion dial back in its balance sheet in September. But the sluggish US dollar triggered market concerns. Bill Gross, who is called the Bond King, said a recession is good for economy. Economy will be more healthy after a downshift. The Fed should reduce balance sheet before interest rate hike, which will help push longer-term bond yields.