Macro Roundup (Sep 1)

SHANGHAI, Sep 1 (SMM) — This is a roundup of global macroeconomic news last night and what is expected today.

The dollar hit a more than two-year low and a fourth straight month of losses on Monday in the wake of the US Federal Reserve’s policy shift on inflation. It is down 1.24% for the month, marking its worst August in five years and the longest run of monthly losses since the summer of 2017.

Investors are adjusting to a speech last Thursday in which Federal Reserve Chair Jerome Powell outlined an accommodative policy change that is believed could result in inflation moving slightly higher and interest rates staying lower for longer.

On Wall Street, the S&P 500 and the Dow just wrapped up their best August in more than 30 years. The blue-chip average rallied 7.6% in August for its fifth positive month in a row and its biggest August gain since 1984. The S&P 500 also rose for a fifth month straight, up 7%, clinching its best August since 1986.

The tech-heavy Nasdaq jumped 9.6% in August, posting its best monthly performance since 2000.

Oil prices nudged up on Monday, with Brent futures set to post a fifth straight monthly gain, as global stimulus measures underpin prices even as demand struggles to return to pre-COVID levels in a well supplied market.

Oil markets largely shrugged off the hurricane’s impact on Friday as energy companies continued efforts to restore operations at US Gulf Coast offshore platforms and refineries shut before the storm.

Germany’s harmonised index of consumer price fell by 0.2% in August and was down by 0.1% year-on-year. Month-on-month, the harmonised index of consumer prices fell by 0.2%.

China's manufacturing purchasing managers' index (PMI) decreased to 51 in August from 51.1 in July, with impacts from heavy floods in the south of the country, official data from the National Bureau of Statistics showed on Monday.

On the SHFE, nonferrous metals, except for aluminium, finished in positive territory in overnight trading. Lead rose 0.89% to lead the gains, copper added 0.81%, zinc advanced 0.35%, nickel edged 0.08% higher and tin firmed 0.59%, while aluminium fell 0.21%.

The Day Ahead

It’s a particularly busy day ahead on the Eurozone economic calendar. Key stats include August manufacturing PMIs for Italy and Spain, German unemployment numbers, and inflation figures for the Eurozone.

Finalized manufacturing PMIs for France, Germany, and the Eurozone and the Eurozone’s unemployment rate will also draw attention.

From the early part of the day, the market’s preferred Caixin manufacturing PMI for China will set the tone.

Later in the session, the ISM Manufacturing PMI will also provide direction, as the markets look for a continued v-shaped economic recovery.