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Macro Roundup (Aug 7)

iconAug 7, 2020 08:48
Source:SMM
Nonferrous metals rose for the most part, and glod prices scaled new heights on Thursday. 

SHANGHAI, Aug 7 (SMM) — This is a roundup of global macroeconomic news last night and what is expected today.

Nonferrous metals rose for the most part, and glod prices scaled new record heights on Thursday. 

Gold extended its record-breaking run on Thursday, driven by expectations of more monetary response as surging virus cases continue to pummel the economy.

Spot gold hit an all-time high of $2,069.21 per ounce and was up 0.8% at $2,055.87. Gold has rallied more than 35% this year as it is considered an asset that should hold its value while the pandemic and money printing by central banks erode the value of others.

The dollar rose on Thursday, taking a breather from its recent weakness after US data showed fewer Americans sought jobless benefits in the week ended August 1. The dollar index briefly pared gains before gaining ground following the claims data, which also showed 31.3 million people were receiving unemployment checks in mid-July, suggesting the US labor market was stalling.

Oil prices hovered near five-month highs on Thursday as support from a weak dollar and Iraq’s planned production cuts counteracted bearish sentiment about fuel demand, pushing the benchmarks in and out of positive territory.

Brent crude was up 9 cents at $45.25 a barrel, while West Texas Intermediate crude fell 24 cents, or 0.57%, to settle at $41.95 after a four-day streak of gains. The two benchmarks rose to their highest since March 6 in the previous session after the US government reported a much bigger-than-expected drop in crude stockpiles.

Iraq said it would make an additional cut in its oil production of about 400,000 barrels per day in August to compensate for its overproduction over the past period under the OPEC supply reduction pact.

Saudi Arabia’s state oil giant Aramco cut its September official selling prices (OSPs) for its Arab light crude for deliveries to Asia by 30 cents a barrel from August, and left its prices to the US unchanged from the previous month. This lent strength to the market, quelling concerns that the producer could slash prices, spiking another price war, said Bob Yawger, director of Energy Futures at Mizuho in New York.

The Wall Street stock market is coming off five consecutive days of gains as the technology sector built on its momentum. This week’s gains in the S&P 500 pushed the equity benchmark just 1.3% below its Feb. 19 record. The Nasdaq Composite also closed above 11,000 for the first time ever on Thursday.

Senate Majority Leader Mitch McConnell told CNBC he believes Democrats and Republicans will strike a coronavirus relief agreement “in the near future.” House Speaker Nancy Pelosi also told CNBC the sides will come to an agreement even as she criticized Republicans for their priorities. Democrats and the Trump administration are trying to resolve disputes over unemployment insurance, an eviction moratorium, relief to state and local governments and school funding.

On the coronavirus front, potential coronavirus vaccines entering late-stage human trials don’t necessarily mean they are almost ready to be deployed widely to the general public, the World Health Organization said Thursday.

“Phase three doesn’t mean nearly there,” Mike Ryan, executive director of the WHO’s health emergencies program, said during a virtual panel discussion with “NBC Nightly News” Anchor Lester Holt hosted by the Aspen Security Forum. “Phase three means this is the first time this vaccine has been put into the general population into otherwise healthy individuals to see if the vaccine will protect them against natural infection.”

On the SHFE, nonferrous metals, except for aluminium, cruised higher in overnight trading. Copper added 0.21%, zinc advanced 0.44%, lead surged 1.98%, nickel rose 0.4% and tin edged up 0.03%.

Their counterparts on the LME increased for the most part on Thursday. Aluminium strengthened 0.99%, zinc jumped 1.07%, lead surged 1.93% and nickel increased 1.3%, while copper and tin were nearly flat.

Data showed that 1.19 million Americans claimed for unemployment benefits in the week ended August 1.

China will release its trade balance, dollar-priced trade balance and foreign exchange reserve for July on Friday. Key economic data, including German industrial output for June, US unemployment rate and non-farm employment for July and wholesale sales for June, will also come out today.

Macroeconomics

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