LME aluminium to head for declines

<p>The US dollar index will find support from US economic data and speeches by US Fed officials. Crude oil prices will face pressure from oversupply. LME aluminium will fall to USD 1,620-1,640/mt. <br /><br />SHFE 1610 aluminium will move at RMB 12,240-12,400/mt, with short selling pressure. <br /><br />In east China&rsquo;s spot aluminium market, spot premiums of RMB 140-180/mt are expected over SHFE 1609 aluminium contract.<br /><br /><strong>Key macroeconomic indicators for base metal prices</strong><br /><br />Eurozone and regional unemployment and inflation, ADP employment for the US and July pending home sales are due for release today. The US dollar index strengthened overnight, while crude oil weakened. Base metals continued to diverge.<br /><br />Inflation rates in Italy, Eurozone and France are expected to improve, but will still remain low. In this context, the European Central Bank may continue to expand its easy monetary measures in the near future.<br /><br />ADP&rsquo;s employment in June and July were both upbeat. But August figures may slide as Markit flash manufacturing PMI in August for the US fell to a 4-month low. Meanwhile, Philadelphia Fed&rsquo;s manufacturing employment sub-indice in August was poor.<br /><br />US existing home sales in July should pick up further. Inventories in US property market were insufficient in June. When combined with faster growth in salaries, demand in the real estate sector should improve.<br /><br />API&rsquo;s crude oil inventories in the US grew further last week, with growth less significant than expected. NYMEX October oil fell slightly.<br /><br />Boston Fed Chairman will speak today. Should his statement turn hawkish, market expectations of a Fed rate hike in the near term will strengthen.</p>