Macro Roundup (Sep 16)

SHANGHAI, Sep 16 (SMM) — This is a roundup of global macroeconomic news last night and what is expected today.

The dollar dropped to a two-week low versus the yen on Tuesday on expectations the Federal Reserve will maintain its downbeat stance on the US economy as it grapples with the pandemic, and keep US interest rates near zero for some time.

The Fed begins a two-day meeting on Tuesday and analysts expect the US central bank to affirm its current zero-interest-rate policy over the next three years.

Oil prices rose nearly 3% on Tuesday, supported by hurricane supply disruptions in the United States, but demand concerns loomed as energy industry forecasters predicted a slower-than-expected recovery from the pandemic.

Futures gained ahead of Hurricane Sally’s expected landfall on the US Gulf Coast. More than a fifth of US offshore oil production was shut and key exporting ports were closed as the storm’s trajectory shifted east toward western Alabama, sparing some Gulf Coast refineries from high winds.

But oil demand’s outlook remains weak, which limited gains during the session. The International Energy Agency (IEA) on Tuesday trimmed its 2020 outlook by 200,000 barrels per day (bpd) to 91.7 million bpd, citing caution about the pace of economic recovery.

The American Petroleum Institute (API) reported late Tuesday that US crude supplies dropped by 9.5 million barrels for the week ended September 11, according to sources. The API data also reportedly showed gasoline stockpiles climbed by 3.8 million barrels, while distillate inventories fell by 1.1 million barrels.

Overnight on Wall Street, the S&P 500 gained 0.5% to close at 3,401.20 while the Nasdaq Composite advanced 1.2% to end its trading day at 11,190.32. The Dow Jones Industrial Average closed just above the flatline at 27,995.60.

Gold edged lower from a near-two week high on Tuesday as the dollar rose, although hopes for a dovish monetary policy stance from the U.S. Federal Reserve limited the safe-haven metals’ losses.

On the data front, Germany’s ZEW survey of economic conditions, published Tuesday, showed that sentiment in Europe’s largest economy significantly exceeded expectations in September.

Germany ZEW Economic Sentiment rose to 77.4 in September, up from 71.5, beat expectation of 70.0. Current Situation rose 15.1 pts to -66.2. Eurozone ZEW Economic Sentiment rose 9.9 pts to 73.9, Current Situation rose 8.9 pts to -80.9.

Retail sales in China rose 0.5% in August from a year ago — the first positive report for the year so far — according to the country’s National Bureau of Statistics. Still, retail sales for the first eight months of the year were down 8.6% from a year ago, the bureau said.

Chinese industrial production grew 5.6% in August from a year ago while fixed-asset investment declined 0.3% for the first eight months of the year.

Industrial Production in the United States expanded by 0.4% on a monthly basis in August, the US Federal Reserve reported on Tuesday. This reading followed July's increase of 3.5% (revised from 3%) and came in worse than the market expectation of 1%.

Key economic data slated for release today include seasonal-adjusted Eurozone trade balance for July, US retail sales for August and inventory data from US Energy Information Administration (EIA).