Macro Roundup (Aug 11)

SHANGHAI, Aug 11 (SMM) — This is a roundup of global macroeconomic news last night and what is expected today.

The dollar rose on Monday, including against major currencies such as the euro and Swiss franc, as investors focused on the fiscal stimulus plan in the United States and US-China tensions ahead of key trade talks this week.

The greenback rose to one-week highs against the euro and Swiss currency.

The dollar index also recouped some losses from July when it fell 4%. Friday’s data on the non-farm payrolls report calmed fears about the US labor market, but the dollar still posted its seventh straight weekly decline.

The dollar’s strength at the end of last week was also due to escalating tensions between the United States and China, with the US imposing sanctions on top Hong Kong and Chinese officials.

This continued to drive investors towards the safe-haven dollar on Monday. China imposed sanctions on 11 US citizens, including legislators.

Senior US and Chinese officials will meet via teleconference on Saturday to review the implementation of their Phase 1 trade deal and likely air mutual grievances.

Gold prices on Monday retreated from an all-time high hit in the last session as the dollar hovered near a one-week peak, while investors awaited an agreement on a U.S. relief bill to help the pandemic-hit economy.

Spot gold fell 0.2% to $2,030.26 per ounce, having hit a record high of $2,072.50 on Friday. U.S. gold futures settled up 0.6% at $2,039.70.

On Wall Street, stocks traded mixed on Monday. The 30-stock Dow gained about 350 points in regular trading on Monday, posting its seventh positive session in a row — its longest winning streak since September 2019. The S&P 500 gained 0.2%, sitting just 0.9% below its record high set in February. Meanwhile, the Nasdaq underperformed with a 0.4% loss.

Oil rose on Monday, supported by an improvement in Chinese factory data, rising energy demand and hopes for an agreement in the United States on more coronavirus-related economic stimulus.

China’s factory deflation eased in July, driven by a rise in global oil prices and as industrial activity climbed toward pre-pandemic levels.

Saudi Arabian Aramco’s Chief Executive Amin Nasser said on Sunday he sees oil demand rebounding in Asia as economies gradually open up after the easing of coronavirus lockdowns.

On the supply side, Iraq said on Friday it would cut its oil output by a further 400,000 barrels per day in August and September to compensate for its overproduction in the past three months.

The sharper cut will take Iraq’s total reduction to 1.25 million bpd this month and next.

Shanghai nonferrous metals, except for copper and zinc, closed lower in overnight trading. Aluminium fell 1.11%, lead shed 0.34%, nickel declined 0.1% and tin weakened 0.23%, while copper rose 0.85% and zinc edged 0.03% higher.

Their counterparts on the LME traded mixed on Monday. Copper surged 2.63%, aluminium rose 1.34% and tin firmed 0.23%, while zinc weakened 0.31%, lead fell 0.73% and nickel declined 1.04%.

China's consumer price index (CPI), a main gauge of inflation, rose 2.7% year on year in July, the National Bureau of Statistics (NBS) said Monday. The rate picked up from the 2.5% growth in June.

Key economic data slated for release today include August ZEW economic sentiment index for eurozone and Germany and US producer price index (PPI) for July.