Good afternoon
just a few figures on the German budget: Fiscal Expenditure of Germany has about doubled in 20 years, and is up by 12% since 2010....and at that time, we were running a deficit, now we are running a surplus of 6 Bill Euro´s....thanks to a massive increase of tax receipts of 220 bill Euro´s to 1220 bill Euro´s since 2010! Someone is paying the bills - and it´s us, the taxpayers!! I leave it up to your eprsonal opinion, whether this money is being spent wisely....
According to Macquarie, Industrial Production increased by 2.8% last year, the highest number in years, driven mainly by China and Japan. They are forecasting the same increase this year. Industrial Production used to be the best proxy for metal consumption.
The PPI in the States increased by 0,3% MoM, Retail Sales ( driven by positive car sales ) increased by 0,6% - both numbers were as expected. For me it´s pretty sure, that we will see stronger inflation numbers around the world in 2017 - the only question being, whether they will be strong enough to scare, or strong enough to satisfy investors! The outcome will be a close call...
Base metals are strong again today - nickel + copper up about 0,5%, zinc and lead by 2-3%! Nickel is the big surprise, I guess....
The US$ is recovering somewhat from the post-press conference lows, and there is nothing stopping equities, which are recovering all of yesterday´s losses as at late afternoon on Friday.
Gold did not manage to close above 1200 US$ yesterday - and today we are seeing the same: It´s being bought in Europe, and sold in the US. I am not surprised, as I am sure, that Europeans are much more afraid of this new US president, than the Americans are! I guess many of them are as primitive as he is....ahem....
Nickel - Indonesia has definitely loosened up the export ban for nickel ore - yet the market is very uncertain about the potential impact. Nickel stocks have been very weak, but the nickel price has slightly strengthened, if anything! And as I am finishing this report, it even has managed to show a small gain in London - it´s now up by about 1%, since the ptnetially negative news has been released! There are many conditions attached to the potential export of nickel ore - I think we will ahve to give it some time, because the impact - in fact, if any - can be quantified. The Indonesian government will have to release more detail, first....
have a nice weekend!
WS