The markets, including the metal markets, have held steady despite the news rather than because of it.The news was not that bad – just less good than the markets were hoping for.
Thus, US non-farm payroll data showed the US economy creating 113,000 jobs in January, according to the Bureau of Labor Statistics. Certainly this was much better than the revised figure of 75,000 new jobs for December, but it was well short of the 180,000 that the markets had been hoping for. Neverthelss, analysts chose to take the view that US economic performance in the second half of last year had been good enough to remain optimistic that better figures would resume in the next few months. And the unemployment rate eased to 6.6% in January from 6.7% earlier.
It was much the same with the Chinese economy. The purchasing managers’ index for services in China for January, compiled for the bank HSBC, eased to 50.7 in January from 50.9 in December. This suggested that the Chinese economy was growing more slowly, and indeed only just growing.
As ever with Chinese data for January, it is hard to know how much this figure has been affected by the Lunar New Year holiday. Nevertheless, numerous analysts were still looking forward to Chinese growth of 7% this year.
There was some good news for the British economy when an opinion poll conducted by the market research organisation Ipsos-MORI showed that 26% of respondents though that the country’s economy would improve. That was the best result for such a poll in 17 years.
Meanwhile, the German Constitutional Court could not decide whether the European Central Bank’s (ECB’s) Outright Monetary Transactions (OMT) programme, designed to allow the bank to buy EU sovereign bonds in the secondary market in an emergency, was legal. It has therefore asked the European Court of Justice to rule, but has mentioned some caveats of its own. The OMT programme is important because it embodies the ECB’s promise to do “whatever it takes” to preserve the euro; indeed, it has calmed the markets since it was set up in September 2012 without the need for a single bond purchase. If it were overruled, the euro could wobble again.
On the London Metal Exchange, aluminium for delivery in three months recovered to around $1,715 per tonne earlier this week from $1,702 a week earlier. Stocks of aluminium in warehouses approved by the exchange dipped to 5,377,000 tonnes earlier this week from 5,415,950 a week earlier.
Three month aluminium alloy rose to $1,805 per tonne earlier this week, from $1,800 a week earlier. LME stocks dipped to 55,160 tonnes earlier this week, from 55,280 a week earlier.
Three month copper was trading at around $7,144 per tonne earlier this week, up from $7,051 a week earlier (with the backwardation at about $45 per tonne, unchanged on the week). LME stocks eased to 306,400 tonnes from 313,875 tonnes a week earlier.
Three month lead rose to around $2,126 per tonne earlier this week, from $2,107 a week earlier, while LME stocks edged down to 205,925 tonnes from 208,425 a week earlier.
Three month nickel was holding at around $14,305 per tonne earlier this week, well up from $13,880 a week earlier. LME stocks eased to 265,686 tonnes earlier this week, from 265,998 tonnes a week earlier.
Three month tin rose to $22,185 per tonne earlier this week, up from $22,100 a week earlier. LME stocks recovered to 8,940 tonnes earlier this week, from 8,890 a week earlier.
Three month zinc stood at around $2,025 per tonne earlier this week, up from $1,964 a week earlier. LME stocks fell to 832,125 tonnes earlier this week from 850,100 tonnes a week earlier.
Steel billet’s three month position eased to $360 per tonne earlier this week, from $370 a week earlier. LME stocks eased to 15,210 tonnes from 16,055 tonnes a week earlier.
Precious metals were steadier after the recent uncertainties. Spot gold bullion was trading at around $1,283.80 per ounce earlier this week, up from $1,255.70 a week earlier. Spot silver climbed to $20.26 per ounce from $19.46, while spot platinum rose to $1,396 per ounce from $1,385.