ICDX tin prices weakened 0.93% compared to the previous week, weighed down by US economic uncertainty regarding the sustainability of monetary policy. A University of Michigan survey showed consumers expect inflation a year ahead to grow at a pace of 3.8%, the highest since a June 2023 reading, while the previous month's data was revised higher to 3.2% from 3.1%. Philadelphia Fed President Patrick Harker noted that he supported the Fed's long-term expectations for monetary policy and also expressed uncertainty about how long interest rates should remain high.
Meanwhile, positive sentiment for tin this week is China's optimistic economic data. China's economy grew faster than expected in the third quarter, GDP grew by 4.9% during July - September compared to a year earlier, exceeding the market's initial prediction of 4.4% growth, said the latest data released by the National Bureau of Statistics on Wednesday. On a quarterly basis, GDP grew by 1.3% in the third quarter, up from a revised 0.5% in the second quarter and above the forecast growth of 1.0%. Additionally, retail sales growth, which is an indication of consumption, also beat expectations, rising 5.5% last month, and improving from a 4.6% rise in August.
Impact on Tin Prices After the FOMC Meeting
Federal Open Market Committee opens the door to another interest rate hike, but market expectations that the hike cycle is over and raising interest rates to fight inflation could slow economic growth and reduce demand for Tin as the cost of economic expansion becomes more expensive.
The Federal Reserve has concluded its last meeting in 2023. As expected, the institution led by Jerome Powell decided to keep its benchmark interest rate unchanged at the current range of 5.25% to 5.50%. TheThe Fed noted that employment gains have slowed since the start of this year, but inflation remains high. The central bank also noted that economic activity expanded rapidly in the third quarter. Jerome Powell said that the rise in long-term yields would have to be sustained and driven by higher term premiums to influence monetary policy. From other data released by ADP showed that in October there was modest growth in private sector payrolls, well below market expectations. The payroll processing company reported adding 113,000 jobs, up from 89,000 jobs in September, but significantly lower than the Dow Jones consensus estimate of 130,000. This development could indicate a potential slowdown in the employment sector.
USD - Empire State Manufacturing Index
USD - Core Retail Sales m/m
USD - Retail Sales m/m
USD - Unemployment Claims
USD - Fed Chair Powell Speaks