SHANGHAI, Feb. 8 (SMM) – Eyes should be on US’s API and EIA crude oil inventory, US’s 30-year MBA mortgage rate and France’s January BOF business confidence index on Wednesday. US Federal Reserve official Patrick Harker expected Fed to raise interest rate in March 2017, sending US dollar index up. US dollar index will advance in a short term and base metals will drop.
Strengthening Dollar to Weigh Down Base Metals, SMM Says
Italy will have presidential election ahead of schedule. This, combined with risks from France’s presidential election, strengthen uncertainties over European political situation. Moreover, US nonfarm payroll report was positive and Fed officials delivered optimistic comment on interest rate hike. Euro thus hit a week’s low and will remain weak with rising US dollar.
US’s EIA will publish monthly energy outlook report on Wednesday. EIA reduced US’s crude oil output estimation to 8.98 million bbl from 9.00 million bbl in 2017 and raise the output estimation to 9.53 million bbl from 9.30 million bbl in 2018. US API crude oil inventory increased sharply from the week ending February 3, sending oil price down. US shale oil output rose significantly, waning positive effect from OPEC member’s oil output reduction.
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