Macro Roundup (Jul 15)

SHANGHAI, Jul 15 (SMM) – This is a roundup of global macroeconomic news last weekend and what is expected today.

Last weekend

The US dollar fell for the third consecutive day last Friday, still pressured by expectations that the Federal Reserve will start cutting interest rates at a monetary policy meeting later this month.

Against a basket of other currencies, the dollar index fell 0.26% and ended at 96.826. 

Chicago Fed President Charles Evans on Friday said the US economy still has "very solid fundamentals" with a vibrant labour market. He said he viewed the Fed's monetary policy as neutral, but it could be more accommodative if the goal is to lift inflation

Base metals closed mostly higher as LME nickel gained 3.5%, zinc climbed 1.8%, lead rose 0.7%, copper and aluminium increased 0.4%, while tin lost 0.3%. SHFE nickel advanced 2%, zinc rose 1.1%, aluminium grew 0.3%, copper and lead went up 0.2%, while tin eased 0.4%. 

China’s exports fell in June as the US ramped up trade pressure, while imports shrank more than expected and reflected further weakness in the world’s second-largest economy and slackening global growth.

In yuan terms, exports in June rose 6.1%, down from the expected 6.9% and the previous growth of 7.7%, while imports shrank 0.4%, compared with the expected rise of 3.7% expected and May’s drop of 2.5%, customs data showed on Friday.

Trade balance for June, in yuan terms, came in at 345.18 billion yuan, compared with the expected 278.5 billion yuan and May’s 279.12 billion yuan.

China’s broad money supply, or M2, increased by 8.5% by the end of June from a year earlier. The growth rate had remained unchanged for three consecutive months starting in April.

Chinese banks issued yuan-denominated loans of 9.67 trillion yuan ($1.41 trillion) in the first six months, and 1.66 trillion yuan was newly extended in June, up from 1.18 trillion yuan in May, said the People's Bank of China last Friday. 

China will maintain a prudent monetary policy in the second half of the year, with potential policy adjustments depending mainly on the domestic economic situation and price levels, a senior central bank official said on Friday.

US producer prices rose slightly in June as the cost of energy and other goods fell for a second straight month, offsetting an acceleration in services. This was the smallest annual increase in producer inflation in nearly two and a half years.

The Labour Department said on Friday its producer price index (PPI) for final demand nudged up 0.1% in June after a similar gain in May. On a yearly basis, the PPI rose 1.7% in June, the smallest gain since January 2017, slowing further from a 1.8% increase in May.

Baker Hughes on Friday reported that the number of active US rigs drilling for oil fell by 4 to 784 for the week ended July 12. That followed a decline of five rigs a week earlier. The total active US rig count, meanwhile, also fell by five to 958, according to Baker Hughes.

Day ahead

China will release data on its consumer goods retail sales, the value added in industry for June, and gross domestic product for the second quarter.  

New York Fed President John Williams will speak at a London Inter-Bank Offer Rate (Libor) briefing today.