Macro Roundup (Jan 18)

SHANGHAI, Jan 18 (SMM) – This is a roundup of global macroeconomic news last night and what is expected today.

Last night

The US dollar increased against the euro, which was dragged lower by weak economic data, while the pound gained on hopes of a second Brexit referendum.

British Prime Minister Theresa May met lawmakers to find a way out of an impasse over how Britain should leave the EU, after her plan was resoundingly rejected by parliament. While she has repeatedly rejected a second referendum, some lawmakers have been very vocal in support of a new vote.

Chicago Federal Reserve Bank President Charles Evans said on Thursday January 17 that it was a good time for the US central bank to pause interest rate hikes given the uncertainty in the economic outlook.

Base metals ended mixed as LME zinc jumped over 1%, aluminium gained 0.57%, copper rose 0.33%, tin grew 0.29%, lead fell 0.6%, and nickel lost 0.17%. SHFE zinc increased over 2%, nickel and copper went up some 0.6%, lead nudged up, while tin dipped 0.3%, and aluminium edged down.  

Eurozone consumer price index (CPI) was finalised at 1.6% year on year in December, lower than 1.9% in November. 

"Eurozone CPI was unexpectedly steady… this could make the European Central Bank’s monetary stance more hawkish and convince Frankfurt to hike rates in the summer, in a 'now or never' decision," said BP Prime analyst Emanuele Canegrati.

Core CPI, which excludes volatile prices of energy, food, tobacco and alcohol, was finalised at 1.0% on a yearly basis, unchanged from November.

"The core measure remained at 1%, confirming that the central bank failed to lift the underlying level of inflation during 2018, spearheaded by cooling global growth and ongoing trade wars that will be weighing on Draghi & co before they can commit to any monetary policy normalisation," said Foenix Partners trader Nick Kilbey.

The number of Americans filing applications for jobless benefits unexpectedly fell last week, pointing to sustained strength in the labour market that is likely to continue to underpin the economy.

Initial claims for state unemployment benefits declined 3,000 to a seasonally adjusted 213,000 for the week ended January 12, the Labor Department said on Thursday. This compared with economists’ expectations that claims will rise to 220,000 in the latest week. 

The four-week moving average of initial claims, considered a better measure of labour market trends as it irons out week-to-week volatility, slipped 1,000 to 220,750 last week.

Day ahead

Economic data slated for release today include the US industrial output for December and University of Michigan consumer confidence index for January. New York Fed President John Williams is scheduled to speak about the US economic outlook and monetary policy at the New Jersey Bankers Association's Economic Leadership Forum.