Speculations about increased demand from China are driving up the prices of nickel, tin and palladium. On the foreign exchange market, the euro hardly reacts to the inflation figures from the euro zone.
The euro stayed well above the $1.13 mark on Thursday. In the afternoon, the common currency cost $1.1351, about the same as the previous evening. The focus was on inflation data. The inflation rate in the euro zone rose to another record high of 5.0 percent in December, mainly due to expensive energy. This is the highest value since statistics began in 1997. It is now more than twice as high as the target set by the European Central Bank (ECB), which is targeting a rate of 2.0 percent as the optimal value for the economy in the medium term. However, according to its President Christine Lagarde, a quick turnaround in interest rates is out of the question for the ECB. The central bank does not have to be as aggressive in monetary policy as the US Federal Reserve is likely to do, Lagarde told French radio station France Inter.
Meanwhile, the Chinese central bank lowered some reference interest rates for loans to counteract a slowdown in the world’s second largest economy. The hope of increasing demand from this important customer country helped copper to rise 0.6 percent to $9903 a ton. The nickel required to make steel reached a ten-and-a-half-year high at $24,435, and the tin used in food cans was at $44,180 more expensive than ever. According to stockbrokers, supply bottlenecks provided additional tailwind. Palladium was also in demand, rising two percent to $2,042 per troy ounce (31.1 grams). The rally was triggered by tensions between Russia and Ukraine, said Commerzbank analyst Daniel Briesemann. After all, Russia is an important palladium supplier. “An export stop of the raw material that is so important for the automotive industry could probably not be compensated.”