SHANGHAI, Aug. 1 (SMM) – On Tuesday, attention should be on China’s Caixin manufacturing PMI in July, final reading of eurozone’s Markit manufacturing PMI in July and annual GDP after seasonal adjustment and US’s core PCE prices in June and final reading of Markit manufacturing PMI in July. US dollar index was weak on Monday’s night trading, and hit one-year low after Trump dismissed White House communications director. Base metals, lacking upward strength, diverged on SHFE market, and metals on LME market outperformed, only LME nickel closed lower.
China’ Caixin manufacturing PMI rallied above 50 in June thanks to improvement of new orders and production. According to official manufacturing PMI relased on Monday, which kept above 50 in July, production and new orders both fell. Hence, Caixin manufacturing PMI will fall short of forecast in July.
SMM Price Outlook for Base Metals on SHFE (Aug. 1, 2017)
Fresh reading of eurozone’s GDP will be 2.1% in Q2 after seasonal adjustment, up 0.2 percentage point from previous data. Manufacturing data has increased for 10 months in a row except that in July which edged down. Markit Chief Economist indicated manufacturing sector to remain in upward track in the second half of year. Unemployment data also hit a new low from February 2009, and positive employment condition will shore up salary growth. This will improve inflation data. As such, positive development of manufacturing sector and labor market will help GDP to increase in Q2 2017. Final reading of eurozone’s manufacturing PMI in July will be released on Wednesday, which is expected to be flat at June’s level.
US’s core PCE prices will stage small changes in June, which has registered constant 3-month drops from February. If the data improves in June, it means that downward strength of economy is weakening and US’s economy will revive soon. However, there is a bog possibility for the data to stabilize based on GDP in Q2. Final reading of US’s Markit manufacturing PMI will be flat at fresh reading in July, a positive sign on the country’s economy in Q3 2017.
