Macro Roundup (Sep 24)

SHANGHAI, Sep 24 (SMM) — This is a roundup of global macroeconomic news last night and what is expected today.

Oil rose more than 1% on Wednesday, supported by US government data that showed crude and fuel inventories dropped last week, although concerns about the ongoing coronavirus pandemic capped gains.

US crude, gasoline and distillate inventories all fell last week, Energy Information Administration (EIA) data showed. Crude inventories fell by 1.6 million barrels, less than forecast; gasoline stocks dropped more than expected, sliding by 4 million barrels; while distillate stockpiles posted a surprise drawdown of 3.4 million barrels.

Elsewhere, better-than-expected German manufacturing data lifted some risk appetite on Wednesday. But COVID-19 infections in countries including India, France and Spain and new restrictions in Britain have renewed worries about demand, just as more supply may come from Libya. In the United States, the death toll has passed 200,000.

Gold extended losses to its lowest since mid-August on Wednesday as the dollar advanced, with investors awaiting further response from major central banks as economic uncertainty looms.

The dollar index hit an eight-week high, dimming the appeal of bullion to holders of other currencies.

On Wall Street, Stocks fell sharply on Wednesday, adding to September’s struggles, as tech shares took another leg lower and investors fretted over uncertainty around the coronavirus pandemic and further stimulus.

The Dow Jones Industrial Average closed 525.05 points lower, or 1.9%, at 26,763.13. Earlier in the session, the Dow was up 176 points. The S&P 500 slid 2.4% to 3,236.92 and the Nasdaq Composite pulled back by 3% to close at 10,632.99.

European stocks closed higher Wednesday as investors reacted to key data releases from the euro zone and weighed up the possibility of further stimulus measures for the region.

The Eurozone manufacturing sector activity continued to improve this month, the latest manufacturing activity survey from IHS/Markit research showed on Wednesday. The Eurozone Manufacturing purchasing managers index (PMI) improved from 51.7 in August to 53.7 in September and beat 51.9 expectations while the Services PMI dropped to 47.6 in September vs. 50.5 expected and 50.5 last. The IHS Markit Eurozone PMI Composite arrived at 50.1 in Sept vs. 51.7 expected and 51.9 previous.

Ahead of that data, Spain revised its second-quarter GDP (gross domestic product) contraction to 17.8% quarter-on-quarter, less severe than the initial estimate of 18.5%. Meanwhile the UK’s flash composite PMI for September came in at 55.7, below expectations of 56.3 and down from 59.1 in August.

The German manufacturing sector expanded more-than-expected in September, the preliminary manufacturing activity report from IHS/Markit research showed this Wednesday.

The German manufacturing purchasing managers' index (PMI) arrived at 56.6 in September versus 52.5 expected and 52.2 previous, fresh 26-month highs. Meanwhile, Services PMI contracted to 49.1 in September as against the previous month’s reading of 52.5 and 52.9 anticipated. The index hit a three-month low.

The IHS Markit Flash Germany Composite Output Index dropped to three-month lows of 53.7 in September vs. 54.2 expected and 54.4 previous.

The business activity in the US manufacturing sector is seen expanding at a robust pace in September with the IHS Markit's advanced Manufacturing PMI rising from 53.1 in August to 53.5. This reading came in slightly better than the market expectation of 53.2.

Further details of the publication revealed that the Services PMI edged lower to 54.6 from 55 and missed experts' forecast of 54.7. Finally, the Composite PMI declined to 54.4 from 54.6.

Key economic data slated for release today include US weekly claims for jobless benefits and adjusted new home sales for August.