Macro Roundup (Feb 1)

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

Last night

LME base metals traded higher across the board on Thursday. Zinc surged 1.3%, lead advanced 1.2%, nickel climbed 1%, Copper gained 0.5%, tin rose 0.4%, and aluminium inched up 0.08%.

SHFE base metals performed similarly overnight. Zinc crept 2.1%, nickel rose 0.9%, tin gained 0.5%, copper advanced 0.4%, aluminium grew 0.2% while lead stayed flat.

The US dollar index recovered on Thursday as the euro slid against the greenback after Jens Weidmann, the Bundesbank president and a member of the European Central Bank Governing Council, painted a bleak picture of the German economy, saying the country's slump will last longer than thought.

China’s manufacturing purchasing managers' index (PMI) came in at 49.5 for January, slightly up from 49.4 in December, the National Bureau of Statistics (NBS) said on Thursday.

A reading above 50 indicates expansion, while a reading below reflects contraction.

Although the figure stayed below the boom-bust line for a second month, the gain ended four consecutive months of decline, NBS senior statistician Zhao Qinghe said.

Despite a decline in the reading for new orders, the sub-index for new export orders rebounded by 0.3 point from December, showing moderate recovery in external demand, he added.

The service sector, which accounted for more than half of the country's GDP, posted stronger expansion with its business index climbing to 53.6 from 52.3 in December.

Boosted by pre-holiday factors and consumption upgrades, wholesale, rail transportation, aviation, delivery, telecom, banking, insurance, tourism and other commercial services posted robust expansion, Zhao said.

The composite PMI, which took into consideration both manufacturing and non-manufacturing sectors, rose 0.6 point to 53.2, the NBS said.

The eurozone economy is estimated to have expanded by 0.2% in the fourth quarter of 2018, according to the preliminary flash estimate published by Eurostat on Thursday.

On a yearly basis, the bloc's seasonally adjusted gross domestic product (GDP) growth rate fell further to 1.2% during the fourth quarter of 2018, down from 1.6% in the previous quarter.

Eurostat also reported that the seasonally-adjusted unemployment rate in the euro area (EA19) was 7.9% in December, unchanged from the previous month.

German retail sales plummeted by 4.3% on the month in December, the fastest rate in 11 years, showed data released by the state statistics office on Thursday.

On a year-on-year basis, retail sales fell by 2.1% in December, versus an expected growth of 1.5%.

German unemployment rate was 5% for January, the Federal Labour Agency said in seasonally-adjusted figures on Thursday, the same level as the previous two months.

The number of Americans filing applications for unemployment benefits surged to near a 1-1/2-year high last week, which could raise concerns that the labour market is slowing, though the numbers may have been skewed by the five-week shutdown of the federal government.

Initial claims for state unemployment benefits jumped 53,000 to a seasonally adjusted 253,000 for the week ended January 26, the highest level since September 2017, the Labor Department said on Thursday.

The Chicago PMI dropped to 56.7 in January, down 7.1 points from December's downwardly adjusted 63.8, according to a statement released Thursday by the Institute for Supply Management Chicago.

Day ahead

Economic data slated for release today include China’s Caixin PMI, Germany’s Markit PMI, the eurozone’s Markit PMI and consumer price index as well as the US nonfarm payrolls report, Markit and ISM PMI, the University of Michigan consumer confidence index and weekly rig count. Data are all for January.