Aluminium yesterday settled down -0.37% at 108.85 in a tight price band ahead of the release of China's July CPI and PPI. While Fisher, President of the Federal Reserve Bank of Dallas, said the US Federal Reserve is nearer to winding down QE3. HSBC's China services PMI for July and US ISM non-manufacturing PMI in July had limited impact on the market. European and US stock markets held largely stable, leaving LME aluminium hovering. The US ISM non-manufacturing PMI rose to 56 in July, driven by a significant increase in new orders. Manufacturing PMI released earlier was also positive, offsetting negative effect from disappointing non-farm payrolls. However, Fisher, President of the Federal Reserve Bank of Dallas, said the US Federal Reserve is nearer to scaling back its bond-buying program and appealed the Fed to taper off QE3 from this autumn, forcing base metals to give back gains. PMI in the UK, France, Italy and euro zone all capped forecasts. Germany's PMI, though missing expectations, did stay above 50. Upbeat figures suggest Europe will get rid of debt crisis soon. HSBC's China services PMI for July was consistent with forecasts. However, HSBC's July China manufacturing PMI fell, in divergence with China official manufacturing PMI. This turned investor attention to China's foreign trade data due Thursday and industrial value-added in July to be announced Friday. Investors will remain worried over metal demand in China ahead of the release of key economic indicators. Technically market is under fresh selling as market has witnessed gain in open interest by 1.25% to settled at 2831 while prices down -0.4 rupee, now Aluminium is getting support at 108.20 and below same could see a test of 107.50 level, And resistance is now likely to be seen at 109.30, a move above could see prices testing 109.70.
Trading Ideas:
Aluminium trading range for the day is 107.6-109.8.
Aluminium ended with small losses as investors digested conflicting data out of China and the U. S.
Upbeat service PMIs from France, Germany and UK and US ISM manufacturing index supported base metals prices
Aluminium daily stocks at Shanghai exchange came down by 998 tonnes
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