Key developments – Flash PMI – China 49.7, Japan 49.2
Recap of Wednesday – The base metals’ prices were for the most part higher yesterday ranging from up one percent on average at the day’s highs to being down 0.4 percent at the day’s lows – they closed with average gains of 0.2 percent, with zinc seeing gains of 1.4 percent, while aluminium struggled, it closed down 0.7 percent at $1,806.50..
Precious metals started the day little changed yesterday, but ended down an average of 1.5 percent lower with the PGMs both off 1.7 percent, silver down 1.4 percent and the gold price off 1.3 percent at $1,187.40.
This morning – The base metals are off an average of 0.3 percent, given the flash PMI data out from China and Japan it could be worse, but volume on the LME has shot higher to 9,738 lots traded, of which 5,091 lots have been copper and 2844 lots have been aluminium. Aluminium is again the main loser, it is down 0.9 percent at $1,791, tin is up 0.3 percent at $15,720, while the rest are lower by between 0.1 and 0.3 percent with copper off 0.2 percent at $5,904.
Precious metals are up an average of 0.3 percent, palladium leads with a 0.5 percent gain to $757.70, silver and platinum are both up 0.3 percent while the gold price is up 0.1 percent at $1,188.20.
Shanghai – The June base metals contracts are mixed with aluminium up 0.8 percent, tin up 0.5 percent and zinc up 0.1 percent, while lead is off one percent, copper is down 0.6 percent at Rmb 42,980 and nickel is off 0.3 percent.
Spot copper in Changjiang is off 0.3 percent at Rmb 43,400-43,550, the backwardation with the futures has widened to an equivalent of $92 per tonne and the LME/Shanghai copper arb ratio is at 1 to 7.26.
The June precious metals in Shanghai are down around 1.2 percent with the gold price at Rmb 237.90/g.
Other markets – Equities were slightly firmer yesterday with the Euro Stoxx 50 up 0.1 percent and the Dow closed up 0.5 percent, while Asia has been mixed this morning with the Nikkei little changed, the Hang Seng is up 0.5 percent, the CSI 300 is up 0.3 percent, but has been volatile since the release of the PMI data and the Kospi is up 1.4 percent.
Currencies – the dollar index is firmer at 98.13, the euro is drifting last at 1.0708, sterling is firm at 1.5028 that despite the approaching general election, the yen is easier at 119.86, the aussie is consolidating at 0.7747, the yuan is at 6.1970 and the rouble is at 51.85.
Economic Agenda – There is a barrage of flash manufacturing and services PMI data out throughout the day, plus we get Spanish unemployment figures, UK retail sales and public sector borrowing, US initial jobless claims, new home sales and natural gas storage – see table below for the schedule.
Near term view – The base metals are quite mixed with tin and zinc pushing on with their price gains, nickel and lead consolidating, while aluminium and copper are weaker. The PMI data out so far bodes ill for commodity demand so those metals that are looking weaker seem to be reacting to that, while tin is still reacting to last week’s sell-off and recent production cutback news and zinc is still seeing follow through buying. But zinc, like lead, is looking a bit stretched on the upside now, so we would not be surprised to see the news flow weigh on prices. Despite the earlier weakness in copper, the lower prices do seem to be attracting some buying, so if the weaker euro has given European PMIs a boost then there may be room for bargain hunting.
The PGMs and silver lead on the downside, while gold has tested a recent low at $1,184. A slightly firm dollar is not helping, but while equities are buoyant and geopolitical risk is largely being ignored, the metals remain out of favour with mainstream investors so it looks as though the downside is once again the path of least resistance after the March rally.
| Overnight Performance | ||||
| BST | 06:33 | +/- | +/- % | Lots |
| Cu | 5904 | -10 | -0.2% | 5091 |
| Al | 1791 | -15.5 | -0.9% | 2844 |
| Ni | 12640 | -15 | -0.1% | 434 |
| Zn | 2233 | -7.5 | -0.3% | 978 |
| Pb | 2039 | -7 | -0.3% | 387 |
| Sn | 15720 | 40 | 0.3% | 4 |
| Steel | 395 | 0 | 0.0% | Total |
| Average (BM ex-Steel) | -0.3% | 9,738 | ||
| Gold | 1188.2 | 0.8 | 0.1% | |
| Silver | 15.82 | 0.04 | 0.3% | |
| Platinum | 1131 | 3 | 0.3% | |
| Palladium | 757.7 | 3.7 | 0.5% | |
| Average PM | 0.3% | |||
| SHFE prices 06:46 BST | Change | % Change | |
| Cu | 42980 | -270 | -0.6% |
| AL | 13215 | 105 | 0.8% |
| Zn | 16535 | 10 | 0.1% |
| Pb | 13500 | -130 | -1.0% |
| Ni | 95960 | -300 | -0.3% |
| Sn | 113450 | 580 | 0.5% |
| Average change (base metals) | -0.1% | ||
| Rebar | 2263 | 8 | 0.4% |
| Au | 237.9 | -2.9 | -1.2% |
| Ag | 3457 | -40 | -1.1% |
| Economic Agenda | |||||
| BST | Country | Data | ACTUAL | Expected | Previous |
| 2:35am | Japan | Flash Manufacturing PMI | 49.7 | 50.8 | 50.3 |
| 2:45am | China | HSBC Flash Manufacturing PMI | 49.2 | 49.5 | 49.6 |
| 8:00am | France | French Flash Manufacturing PMI | 49.4 | 48.8 | |
| 8:00am | France | French Flash Services PMI | 52.5 | 52.4 | |
| 8:00am | Spain | Spanish Unemployment Rate | 23.5% | 23.7% | |
| 8:30am | Germany | German Flash Manufacturing PMI | 53.1 | 52.8 | |
| 8:30am | Germany | German Flash Services PMI | 55.6 | 55.4 | |
| 9:00am | EU | Flash Manufacturing PMI | 52.6 | 52.2 | |
| 9:00am | EU | Flash Services PMI | 54.5 | 54.2 | |
| 9:30am | UK | Retail Sales m/m | 0.4% | 0.7% | |
| 9:30am | UK | Public Sector Net Borrowing | 6.6B | 6.2B | |
| 1:30pm | US | Unemployment Claims | 288K | 294K | |
| 2:45pm | US | Flash Manufacturing PMI | 55.6 | 55.7 | |
| 3:00pm | US | New Home Sales | 514K | 539K | |
| 3:30pm | US | Natural Gas Storage | 78B | 63B |
The post PMI manufacturing data likely to set the agenda appeared first on The Bullion Desk.
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