Monthly Metal Review
- March 2019
- February 2019
- January 2019
- December 2018
- November 2018
- October 2018
- September 2018
- August 2018
- July 2018
- June 2018
- May 2018
- April 2018
- March 2018
The London Metal Exchange is looking towards the future and it seems to be in Asia. Hong Kong Exchanges and Clearing (HKEx) topped three US exchanges with a knockout $2.2-billion bid for the LME, making for a commodities-trading shift away from London and Chicago. HKEx wants warehouses on the Chinese mainland and has access to users and merchants there.
Bank of England Governor Mervyn King warned that the euro crisis is not yet even "halfway through", recommending to follow the reforms suggested by the Independent Commission on Banking. In what seemed to indicate a loosening of the austerity leash by German Chancellor Angela Merkel. EU leaders agreed in late June to help reduce runaway borrowing costs for Italy. Aiming to ease rules on using bailout funds of for ailing Spanish banks, and to create a single supervisory body for euro zone banks by January. The Euro Stoxx bank index has, in a year, shrunk 46 percent. Moody's downgraded the ratings of more than 15 giant European banks. The IMF said EU leaders should empower central bank to restart bond buying and pump money directly into stumbling banks.
China's economic indicators showed a slower growth in June. China's central bank cut interest rates for the first time since 2008. Economists expect the second-quarter growth to be over 7 percent. China’s May exports and imports grew twice as fast as expected, and crude-oil prices fell to an 18-month low in June.
Inflation spiked in India, setting the rupee at an all-time low against the dollar. India's gold market withered as a result.
On a slightly brighter note, US manufacturing showed some signs of recovery, although at a very slow pace. Commerce Department data showed durable goods orders climbed more than forecast in May. The National Association of Realtors said more Americans than expected signed to buy previously owned homes. Resales climbed 5.9 percent. US automakers had their best May since 2008. Operation Twist, a program that promotes selling short-term bonds and buying longer-term securities to support US recovery, was extended to 2013 by the Federal Reserve.
Overall the metal market has been rather quiet in June. After initial weakness early in the month, Copper and Zinc finally gained 3.8% and 1.21% respectively over the period. Meanwhile Lead and Tin were falling by 4.54% and 2.85%. The worries surrounding the sovereign debt in the European Monetary Union and their negative economic impact on other key economies such as the U.S or China led to a global metal market weakness with no clear direction.
However, investors' restored confidence, following the EU's late June summit, could have a strong impact on metals markets in the upcoming weeks.