Macro Roundup (Nov 18)

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

The dollar fell to a one-week low on Tuesday in quiet trading, still weighed down by optimism over a second coronavirus vaccine, as the outlook for the currency remained downbeat with the Federal Reserve and U.S. Congress poised to do more to ease COVID-19′s economic damage.

The euro, sterling, Swiss franc, and yen rose against the dollar, while the Chinese yuan hit its highest against the U.S. currency since June 2018.

Drugmaker Moderna became the second U.S. pharmaceutical company in a week to report positive results from trials of a COVID-19 vaccine, considered necessary to eradicate the pandemic.

Policymakers’ response to a record number of coronavirus cases, hospitalisations and deaths in several U.S. states is likely to remain of greater concern.

On Wall Street, U.S. stock futures were flat in overnight trading on Tuesday as investors digested the recent record rally in equities.

Dow futures fell 16 points. Futures for the S&P 500 and Nasdaq-100 lost 0.04% and 0.03%, respectively.

On Tuesday, the Dow Jones Industrial Average fell more than 167 points, dragged down by Walgreens, Home Depot and Walmart. The S&P 500 lost 0.5%. Tuesday’s session was the first time in three days the Dow and S&P 500 fell, following their record closes on Monday.

The Nasdaq Composite was the relative outperformer, dipping just 0.2%. Tesla shares popped more than 8% after after S&P Dow Jones Indices said that the electric vehicle company will join the S&P 500.

Oil prices were little changed on Tuesday as worries that lockdowns to fight a new surge in coronavirus cases could hit short-term demand counteracted hopes for a vaccine and the possibility of tighter OPEC+ supply policies.

Brent futures advanced 8 cents to $43.90 per barrel, while U.S. West Texas Intermediate crude settled 9 cents, or 0.2%, higher at $41.43 per barrel.

On Monday, Brent closed at a 10-week high following Moderna Inc’s announcement that its coronavirus vaccine was 94.5% effective. That followed similar news from Pfizer Inc last week.

But the short-term economic outlook remains hazy with several European nations tightening restrictions as coronavirus cases increase.

To tackle weaker energy demand amid a wave of new coronavirus cases, Saudi Arabia called on fellow OPEC+ members to be flexible in responding to oil market needs as it builds the case for a tighter production policy in 2021.

Gold steadied in a narrow range on Tuesday, as a weaker dollar and concerns about mounting coronavirus cases and its impact on the economy were countered by optimism about the race to deliver a vaccine.

Spot gold was down 0.2% at $1,884.91 per ounce. U.S. gold futures settled 0.1% lower at $1,885.10.

“There is a lack of conviction on the trajectory of safe haven flows, we’ve all this vaccine optimism in place, but we also have the U.S. and Europe still struggling with the pandemic,” said Edward Moya, senior market analyst at OANDA. “Longer term trends are still supportive for gold to rally, but we’re seeing some investors kind of abandon their bullish bets. The vaccine news for many has made holding gold longer term less appealing.”

Gold shed as much as 1.3% on Monday after Moderna said its vaccine was 94.5% effective in preventing COVID-19 in a late-stage trial, becoming the second U.S. drugmaker after Pfizer to report results that exceeded expectations.

Meanwhile, U.S. retail sales rose less than expected in October and could slow further amid rising infections and new restrictions.

Key economic data slated for release today include Eurozone Consumer Price Index for October (not seasonally adjusted), US Building Permits for October, US Housing Starts for October and US Crude Oil Stocks Change as of November 13.