LIVE FUTURES REPORT 10/01: SHFE base metals prices consolidate as focus turns to US jobs report

Base metals on the Shanghai Futures Exchange were mixed but confined to narrow ranges during morning trading on Friday January 10, with participants staying fairly cautious ahead of key employment data out of the United States later.

While tensions between the US and Iran continue to ease, markets are switching focus back to the global economic outlook and the next major indicator of that, the US’ December jobs report, which is due later today.

“We started the working week, the first of the year for many of us, lamenting the death and destruction (still) being wreaked by Australia’s bushfires, were then distracted on Tuesday and Wednesday by the possible outbreak of WWIII and are ending it, ahead of tonight’s US employment report at least, with risk sentiment at its best level of the year as proxied by the [CBOE Volatility Index], now back below 13,” Ray Attrill, head of foreign exchange strategy at National Australia Bank, said in a morning note.

In regard to the upcoming US employment report, economists expect 162,000 jobs were created in December, fewer than the 266,000 created in the prior month, while wage growth is expected to have held steady at 3.1% year on year. The unemployment rate is also forecast to be flat at 3.5%, holding at a 50-year low.

Meanwhile, the signing of a “phase one” trade deal between China and the US next week is key another event on the horizon, but market participants look to be waiting for confirmation of the deal being signed before becoming overly bullish.

As a result, the SHFE base metals were decidedly mixed at the close of Friday’s morning trading session.

The most-traded March copper contract slipped to 48,960 yuan ($7,043) per tonne, down by 60 yuan per tonne - or 0.1% - from Thursday’s close of 48,900 yuan per tonne.

Losses were also seen in March zinc, which fell by 0.5% to 18,260 yuan per tonne, March nickel, which dipped by 0.1% to 111,480 yuan per tonne, and June tin, which was down by 0.2% at 137,450 yuan per tonne.

Aluminium was the outperformer of the SHFE base metals this morning with a 0.6% gain to 14,080 yuan per tonne, while March lead edged up by 0.2% to 14,970 yuan per tonne.

Other highlights
  • The dollar index, which gauges the strength of the US dollar against a basket of foreign currencies, changed little at 97.41 as at 11.54am Shanghai time, against a reading of 96.76 at a similar time a week ago.
  • In European data on Thursday, the European Union’s unemployment rate for the December period held at 7.5%, while German industrial production on a month-on-month basis for the same period improved by 1.1%.

Sally Zhang

sally.zhang@fastmarkets.com

Published

Sally Zhang

January 10, 2020

04:50 GMT

Shanghai