LME aluminium to see range-bound trading next week, SMM says

<p>LME aluminium will trade in a narrower range next week, while SHFE 1610 aluminium will consolidate at highs, SMM predicts.<br /><br />SMM sees LME aluminium between $ 1,620-1,680 per tonne. Low aluminium stocks in China and expectations for improving aluminium consumption in September will allow SHFE 1610 aluminium to hold at highs of 12,200-12,500 yuan per tonne. <br /><br />Aluminium ingot arrivals into east China are likely to increase slightly. Stabilizing SHFE aluminium might prompt some suppliers in spot market to sell. Spot premiums in east China aluminium market will narrow to 150-200 yuan per tonne over SHFE 1609 aluminium. &nbsp;<br /><br /><strong>Key macroeconomic indicators for base metal prices</strong><br /><br />In a much-anticipated speech on August 26 at the central bank's annual Jackson Hole summit, Fed Chair Janet Yellen voiced optimism about the economy and an expectation that interest rate hikes are ahead. US Federal fund rate indicated 50 per cent possibility for a rate hike in December. This also boosted expectation for a rate hike in September. But overheated speculating activities fell about 80 basis points to 94.25 following a rise of over 50 basis points to 95.03. But US Fed Vice Chairman Fischer noted that Yellen&rsquo;s speeches showed likelihood of a rate increase in September. US dollar index thus surged more than 130 basis points to 95.59.<br /><br />Market will focus on US nonfarm payroll report due for release on September 2, which will affect US Fed&rsquo;s decisions. Markets expect the figure to rise 180,000 in August. Should the figure return above 200,000, the bets of a rate hike in September are rather high.<br /><br />Manufacturing PMI from each country will come under spotlight this week. Should China&rsquo;s manufacturing and service PMIs continue diverging from each other, markets may hold pessimistic attitudes toward demand outlook.<br /><br /></p>