The metal markets recovered more of their poise this week.
Part of this was a reaction to recent selling on the London Metal Exchange. But there was also the advance estimate of US gross domestic product in the first quarter from the Department of Commerce’s Bureau of Economic Analysis, which was up at an annual rate of 2.5% from the final quarter of last year.
This was less than the 3% increase that had been expected by economists, but it was still enough of an improvement on the 0.4% increase recorded between the third and fourth quarters of last year for the markets to be generally content.
Earlier, the Department of Commerce’s Census Bureau had noted that new orders for manufactured durable goods had dropped by 5.7% in March, having risen by 4.3% in February.
The other major player, China, was on national holiday until this week, which left the markets relatively calm. Nevertheless, the two purchasing managers’ indices for manufacturing, one official and one produced for the bank HSBC, were due to be published as MRW went to press.
In Germany, the business climate deteriorated, according to the Ifo Institute for economic research. The relevant index fell to 104.4 in April from 106.7 in March, although most companies still considered their current business situation to be good.
The business climate indicator for the manufacturing sector fell significantly, and capacity utilisation was down.
But rival researcher GfK showed the consumer mood in Germany to be “extremely robust”, with the relevant indicator rising to 6.2 points for May from a revised figure of 6.0 for April. More generally, economic sentiment across the eurozone fell by 1.5 points to 88.6 in April, according to the European Commission.
There were also sufficiently good figures from Japan to encourage hopes that the new government’s dramatic efforts to kick-start the economy might be working. While industrial production rose by barely 0.2% in March, below hopes of a 0.4% rise, a purchasing managers’ index for manufacturing, compiled for the Japan Materials Management Association, rose to 51.1 in April from 50.4 in March. In addition, household spending rose at an annual rate of 5.2% in March.