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SMM Lead Market Morning Review (2014-12-4)

Release time:2014-12-04

Dec 04, 2014 01:58 GMT   Source:SMM

 

 

SHANGHAI, Dec. 4 (SMM) – LME lead fluctuated between USD 2,014-2,038/mt on Wednesday and finished down USD 8.25/mt at USD 2,026.25/mt. Trading volumes for three-month lead on the London Metal Exchange shrank 1,591 lots to 2,753 lots, and positions gained 1,798 lots to 113,818 lots. LME lead inventories added 250 mt to 229,075 mt.

The ADP jobs report released on Wednesday shows that companies in the US added 208,000 workers in November, indicating steady progress in the labor market. The October increase in employment was revised up from 230,000 to 233,000. The ISM non-manufacturing PMI hit a 8-month high of 59.3 in November, far above the expected 57.5. The Federal Reserve reported in its Beige Book that US regions recorded broad-based employment gains and that economic activity continued to expand October through November. US consumer spending increased, while the economy benefited from a drop in oil prices. These encouraging economic indicators helped drive the US dollar index above the 89 mark and contributed to a broad rise in US equities.

Economic numbers in the euro zone, in contrast, remained downbeat. The single currency area’s composite PMI came in at 51.1 in November, shy of expectations and October’s reading. Retail sales in the area edged up 0.4% MoM in October, missing the estimated 0.5% rise.

China’s stock markets have attracted large inflows of capital and seen a sharp rise in new accounts, with margin balance approaching RMB 1 trillion. Nonferrous metals stocks posted the biggest gain across the board on Wednesday. 

The US dollar index advanced 0.36%, while the euro slipped 0.59% versus the greenback. European and US equities rose. LME nickel surged 1.78% and LME zinc closed slightly higher, but other base metals fell on Wednesday.

On Thursday, investors should keep an eye on the European Central Bank (ECB) and Bank of England (BOE)’s December final decisions on interest rate as well as US initial jobless claims for the week ending November 27. Dispiriting economic data in the euro zone and the tumble in crude oil prices both have boosted expectations of more stimulus measures by the ECB.

LME lead is set to hover between USD 2,010-2,035/mt, and the most active SHFE 1501 lead contract is expected to move at RMB 13,350-13,450/mt on Thursday. Traded prices on China’s spot lead markets should slide to RMB 13,400-13,550/mt.