Macro Roundup (Feb 1)

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

The dollar was little changed on Friday while the Japanese yen sank to its lowest since mid-November as investors rebalanced portfolios for month-end.

The greenback has been largely range-bound against a basket of currencies for the past two weeks as investors evaluate whether a selloff that sent the currency down almost 7% last year is likely to continue.

It was little changed against a basket of currencies on Friday at 90.57. The index is up 1.53% from a three-year low of 89.206 reached on Jan. 6.

On Wall Street, the Dow dropped 620 points on Friday, or 2%, to close below the 30,000 level for the first time since December. The Nasdaq Composite also slipped 2%, while the S&P 500 fell 1.9%.

For the week, all three major averages slipped more than 3% for their worst weekly performance since October. The Dow and S&P also posted losses for January — the first negative month in four — although the Nasdaq did manage to post a gain for the month.

Friday’s dip came amid a frenzy of activity by retail investors in heavily-shorted stocks including GameStop and AMC Entertainment, which fueled concerns about the overall health of the market. Goldman Sachs noted that the current short squeeze is the worst in 25 years.

Oil prices dipped on Friday due to demand worries over coronavirus variants and slow vaccine rollouts, which offset a bullish sentiment due to a cut in Saudi Arabian oil supply and falling U.S. oil inventories.

A group of 10 Republican senators sent President Joe Biden a letter on Sunday, urging him to consider a smaller, scaled down Covid-19 relief proposal. His current plans calls for $1.9 trillion in additional fiscal stimulus. The alternative proposal comes after House Speaker Nancy Pelosi said the chamber will move to pass a budget resolution, the first step toward approving legislation through reconciliation. The process would enable Senate Democrats to approve an aid measure without GOP votes.

On last Friday, the European Medicines Agency approved the vaccine developed by British pharma giant AstraZeneca for emergency use in the EU, around a month after it was first given the greenlight in the U.K., which recently left the bloc.

But the European Commission also on placed temporary controls on the export of coronavirus vaccines made inside the bloc, following a spat with AstraZeneca and wider supply issues.

On the data front, the French economy contracted by less than expected in the fourth quarter of 2020 amid a second national coronavirus lockdown, official statistics revealed Friday. Fourth-quarter GDP (gross domestic product) came in at -1.4%.

China’s official manufacturing Purchasing Managers’ Index came in at 51.3 in January, according to a statement by the country’s National Bureau of Statistics on Sunday.

In comparison, the reading for December was 51.9 and remained above the 50-level, which indicates growth. PMI readings below that level signal contraction.

Looking ahead, a private survey of Chinese manufacturing activity in January is set to be released, with the Caixin/Markit manufacturing PMI expected to be out around 9:45 a.m. HK/SIN on Monday.

Other key economic data slated for release today include Germany retail sales for December, January Markit manufacturing PMI for Eurozone and the US, Eurozone unemployment rate in January and US ISM manufacturing PMI.