Indonesian ban on ore exports supports nickel higher

Monday, January 13, 2014

US stocks ended last week on a positive note supported by a weaker than expected jobs report which alleviated concerns that the Fed would aim for a rapid withdrawal of QE. The S&P 500 added 0.23% on Friday, gaining 0.6% throughout the week after a surprise drop in December non-farm payrolls. 74K jobs were added throughout the month, declining 167K m/m and well below analyst expectations of 197K additions, however, the unemployment rate still managed to fall to 6.7% from the prior figure of 7% as more people left the labour force, according to the Department of Labor. Market participants may hold off from committing significant positions today as they hold off for the Fed’s monthly budget statement to provide further market colour.

Spot gold prices rallied 1.7% on Friday on the weaker non-farm payroll numbers as investors approached markets with caution. Prices have rallied almost 4% since the start of the month, pushing past resistance at the 50 day MA towards $1245 on Friday, however, prices are struggling to hold on to tentative support around $1,250 as investors largely adopt a risk on attitude.

Indonesia has signed in a ban on mineral ore exports, supporting three month LME nickel prices 3.6% higher on Friday while the rupiah also made steady gains against the dollar. The ban, which was put in action yesterday will prohibit the export of all raw ore from companies that are not on an approved list for planning local processing, according to Energy and Mineral Resources Minister Jero Wacik. It is hoped the ban will benefit domestic companies, turning Indonesia from an exporter into a processor and manufacturer of higher value products.

Change in non-farm payrolls came in significantly below expectations

NFP TCH Index US Employees On N 2014 01 13 07 47 27

3-month LME nickel prices supported by Indonesian ban

LMNIDS03 Comdty LME NICKEL 3 2014 01 13 07 36 51

 Rupiah strengthens as ban on mineral ore exports comes into effect

IDR Curncy Indonesian Rupiah Sp 2014 01 13 07 37 40


Events for today: Monday, 13 January 2014

JP Market Holiday

1900

US

Dec

Fed Budget

View Economic Market Calendar

More from: Kash Kamal