Macro Roundup (May 15)

SHANGHAI, May 15 (SMM) – This is a roundup of global macroeconomic news last night and what is expected in the day ahead.

The US dollar hit a three-week high on Thursday before giving back much of those gains, as investors continued to digest Federal Reserve Chairman Jerome Powell’s dismissal of speculation over US interest rates entering negative territory and his glum forecast for the economy.

As for the closely watched US weekly jobless claims, data published Thursday showed millions more Americans, including white-collar workers, filed for unemployment benefits last week. The US Labor Department said that initial claims for state unemployment benefits totaled a seasonally adjusted 2.981 million for the week ended May 9. That was down from 3.176 million in the prior week and marked the sixth straight weekly drop.

US stocks and oil prices, however, appeared to have shrugged off the stark warning from the central bank leader and dismal unemployment data, and rallied on Thursday.

The Dow rallied more than 300 points while the S&P 500 gained over 1% on Thursday. The Nasdaq Composite advanced 0.9%.

The International Energy Agency (IEA)’s forecast of lower global stockpiles in the second half of 2020 helped lift oil prices on Thursday. The IEA on Thursday expected crude stockpiles to shrink by about 5.5 million barrels per day in the second half as demand increases, although it again forecast a record drop in demand for the full year of 2020.

The US Commodities Futures Trading Commission warned exchanges and brokerages on Thursday that they should be prepared for volatility and possible negative pricing for certain contracts as expiration approaches next week.

LME base metals traded mostly higher on Friday morning, following mixed performance in the previous session. On Thursday, LME copper, aluminium and zinc were barely changed, while lead rallied 1.4%. Nickel and tin extended their declines, shedding 1.6% and 0.3%, respectively.

On the SHFE, base metals also traded mixed in overnight trading, and nickel dropped 1.2% to be the biggest loser. Tin slipped 1%, copper inched down 0.1%, while aluminium gained 0.4% and lead edged up 0.04%. Zinc stayed flat.

In Europe, German consumer prices decelerated in April, driven by the sharp drop in energy prices, German statistics agency Destatis said Thursday.

The consumer price index (CPI) increased 0.4% compared with March and increased 0.9% compared with the same month a year earlier, Destatis said. Both figures were slightly above the forecasts of economists polled by The Wall Street Journal of a 0.3% increase month-on-month and a 0.8% increase year-on-year.

The European Union-harmonized inflation index rose 0.4% compared with March and rose 0.8% compared with the previous year. These figures were in line with the forecasts of The Wall Street Journal.

China’s retail sales, industrial production and fixed asset investment data for April are set to be out on Friday at around 10:00 a.m. Beijing time.

US retail sales and industrial production figures for April, and the eurozone’s gross domestic product (GDP) for the first quarter will also be released on Friday.