Chinese gross domestic product should rise by 6-6.5% in 2019

by David Fleschen

At the beginning of the National People's Congress of the Chinese Communist Party, the government presented its goals for 2019. According to this, the gross domestic product should rise by 6-6.5% this year. In each of the past two years, a target of + 6.5% has been issued. At the same time, a tax reduction package totaling 2 trillion CNY (just under $ 300 billion) announced. The budget deficit is expected to amount to 2.8% of GDP, after 2.6% in the previous year. The measures announced were all in line with expectations or had already leaked out. The tax cut package is still the largest in Chinese history. All in all, the government is trying to prevent an economic downturn in the country. Although metal demand should benefit from the stimulus measures, metal prices on the LME this morning are largely unimpressed. At the SHFE, prices are even declining.

However, nickel stands out at the LME today. The price has apparently picked up momentum, rising to a 6-month high this morning at around $ 13,600 a tonne. Since there is no new fundamental news, reseachres attribute the price increase to technical purchases after the 200-day line has held. In addition, speculative financial investors should have continued to buy nickel. According to the LME statistics, their net long positions were already above average last week.
Source: Commerzbank Research, Photo: Fotolia

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