Metals News
Macro Roundup (Jan 15)
data analysis

SHANGHAI, Jan 15 (SMM) – This is a roundup of global macroeconomic news last night and what is expected in the day ahead.

Last night

The US dollar reserved earlier gains against a basket its rivals on Tuesday, after a report said that the US will keep tariffs on Chinese goods through the US election.

The news came a day before the signing of a preliminary US-China trade agreement. Bloomberg News reported that the US will review and remove existing tariffs no sooner than 10 months after the deal is signed.

Overall optimism surrounding the imminent signing of a trade deal, coupled with better-then-expected Chinese trade data supported oil and copper prices on Tuesday. US oil prices climbed after five days of declines, and London copper prices hit a new eight-month high.

LME base metals, except for nickel and zinc, closed higher on Tuesday. Lead added 2% to lead the gains, aluminium advanced 0.6%, copper gained 0.3% and tin inched up 0.2%.

The SHFE complex performed similarly overnight. Lead climbed 0.7%, copper rose 0.5%, tin increased 0.4% and aluminium edged up 0.04%, while zinc inched down 0.1% and nickel dropped 1.6%.  

China’s exports increased 0.5% in 2019 from a year earlier, while imports declined 2.8% in dollar terms, the customs administration said Tuesday. That left the trade surplus at $421.5 billion for the year.

In December, both import and export growth exceeded expectations, rebounding from a weak month previous. Exports rose 7.6% while imports surged 16.3%

Oil prices eased after the American Petroleum Institute (API) reported an unexpected increase in US crude inventories last week. API data showed that US crude supplies rose by 1.1 million barrels for the week ended January 10, compared to analyst expectations of a 474,000-barrel draw. The API data also showed a stockpile climb of 3.2 million barrels for gasoline, while distillate stocks rose by 6.8 million barrels.

A separate report from the US Labor Department on Tuesday showed that US consumer prices rose slightly in December and monthly underlying inflation pressures retreated, which could allow the Federal Reserve to keep interest rates unchanged at least through this year.

US consumer price index (CPI) increased 0.2% last month after climbing 0.3% in November. The monthly increase in the CPI has been slowing since jumping 0.4% in October. On a year-over-year basis, the CPI rose 2.3% in December, the largest increase since October 2018 and followed a 2.1% gain in November.

The CPI accelerated 2.3% in 2019, the largest rise since 2011, after increasing 1.9% in 2018. Economists polled by Reuters had forecast the CPI would rise 0.3% in December and advance 2.3% year on year. Excluding the volatile food and energy components, the CPI edged up 0.1% after climbing 0.2% in November.

Day ahead

German 2019 gross domestic product (GDP), the eurozone’s November trade data as well as the US December producer inflation data and weekly crude inventory data from the Energy Information Administration (EIA) are slated for release today.

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