Key Macroeconomic Indicators for Base Metal Prices (2017-5-5)

SHANGHAI, May 5 (SMM) –Market will eye US April non-farm payrolls, jobless rate and wage data on Friday. 

Market is divided over US April non-farm payrolls.

US non-farm payrolls increased just 98,000 in March, well below forecast for 180,000 increase and 235,000 growth in February. Jobless rate fell to 4.5% in March, evidence of strong labor market. As such, some investors expect US non-farm payrolls to rise markedly in April, which will boost the US dollar. Data over the past ten years showed non-farm payrolls in April were usually much better than in March.  

Others are pessimistic that US non-farm payrolls will fall further in April. Employment sub-index under ISM’s US manufacturing PMI fell sharply in April. ADP employment in April, though better than expected, was much lower than in March. New employment in construction and retail sale sectors fell sharply. These will bode ill for non-farm payrolls in April. The US dollar will take a hit if non-farm payrolls in April turn out to be poor and expectations for rate hike in June will be affected.   

It is expected that wages in the US will rise in April. Employment cost index rose 0.8% in Q1, better than 0.6% expected and 0.5% growth in Q4 2016. Wages rose 0.8% in Q1 and welfare cost rose 0.7%, versus 0.5% growth in Q4 2016. Quarterly employment cost data indicated signs of acceleration in wage growth.   

China will release foreign exchange reserve data for April on Saturday. China’s foreign exchange reserves rebounded after falling below USD 3 trillion in January and are expected to see limited changes in April. 

See SMM price forecast, please click: SMM Price Outlook for Base Metals on SHFE (May 5, 2017)