SMM Lead Market Morning Review (2015-5-8)

SHANGHAI, May 8 (SMM) – LME lead started at USD 2,084/mt Thursday night and then moved lower to USD 2,052/mt on investors’ weak confidence and falling A-share. LME lead ended at USD 2,077/mt, dropping USD 7/mt. Trading volumes were down 1,025 to 4,988 lots. Positions surged 1,738 to 153,679. Inventories in LME lead fell 1,825 to 164,525 mt.

SHFE 1507 lead was down RMB 180/mt to RMB 13,470/mt with SMM/LME lead price ratio falling to 6.46.

US initial jobless claims released Thursday night rose 3,000 to 265,000 in the week ending May 2, better than expectation 277,000. March customer credit climbed USD 20.523 billion, more than expectation USD15.8 billion. US Fed's Evans reported that 2016 is the best time for interest rate hike and Q2 economic growth rate will rebound to 3%. Growth in April non-farm payroll data may exceed 200,000, pushing US dollar index up 0.55% to 94.6

In euro zone, data from Germany and France were upbeat. UK data reported that its people showed confidence in future economy. Ten-year bond yields in Japan touched a two-month high of 0.42% and benchmark bond yields in South Korea increased to 2.54%, a three-month high. India’s bond yields surged to 8%, the highest since December 2014.

Schlumberger Ltd., an oil services giant, was fined USD 2327 million by the Justice Department as Schlumberger offered trade services for Iran and Sudan. Iran's oil minister showed that output will rise to 4 million bbl per day within eight months after sanctions canceling, weighing New York crude oil down 3.3%.

Precious metals posted modest decline. LME base metals diverged while China’s A-share dropped near 400. Cautious sentiment overshadowed market.

LME lead should move between USD 2,060-2,100/mt. SHFE 1507 lead is expected to hover between RMB 13,370-13,550/mt and spot lead RMB 13,550-13,700/mt.