Key Macroeconomic Indicators for Base Metal Prices (2017-8-11)

SHANGHAI, Aug. 11 (SMM) – US July CPI and IEA’s crude oil inventory report will be released today. US PPI were downbeat, weighing down the US dollar index. Fed Dudley’s speak failed to boost the US dollar. CPI will significantly affect the US dollar. SHFE and LME base metals were upbeat thanks to ferrous metals. Other products were mixed. LME base metals outperformed SHFE base metals.

 SMM Price Outlook for Base Metals on SHFE (Aug. 11, 2017)

US inflation data have been sluggish from February 2017, sliding for 4 months in a row. This slowed Fed’s rate hike process. US PPI released yesterday fell short of market expectations but will not affect the market significantly. Fed Chairwoman Janet Yellen and many Fed officials believe the slackening of inflation will only be temporary. Fed Dudley expressed his confidence toward inflation in his statement yesterday. Positive US non-farm employment, rising salary and falling unemployment data also bode well for July’s inflation. So, US July CPI is expected to rise. US July CPI before seasonal adjustment will be 1.8%.

Oil prices experienced big volatility this week, remaining above 100-day moving average due to mixed news. IEA’s oil inventories slated for release today will be decisive for oil price trends.