Macro Roundup (Mar 16)

SHANGHAI, Mar 16 (SMM) – This is a roundup of global macroeconomic news last weekend and what is expected in the day ahead.

Last weekend

The dollar fell against a broad range of currencies after the US Federal Reserve made another surprise interest rate cut and major central banks took steps to relieve a shortage of dollars in financial markets.

LME base metals rallied to close mostly higher on Friday, with nickel leading the gains with a 3.6% surge. Zinc jumped 1.8%, aluminium rose 1.7%, and copper advanced 0.3%, while lead fell 0.7% and tin dropped 1.7%.

The Fed on Sunday evening US time cut rates by a full percentage point to a target range of 0% to 0.25%, the second rate cut in two weeks, and said it would expand its balance sheet by at least $700 billion in coming weeks.

Five other central banks also cut pricing on their swap lines to make it easier to provide dollars to their financial institutions facing stress in credit markets.

US President Donald Trump declared a national emergency over the fast-spreading coronavirus on Friday, opening the door to more federal aid to combat the disease.

On the data front, German statistics agency, commonly known as Destatis, revealed a 0.4% growth in German consumer prices in February. German CPI had previously noted an identical growth in January while the analysts had also forecast 0.4% growth in the index in February. On a year over year basis, German consumer prices posted a 1.7% increase that also came in line with the economists’ forecast.

The US Labor Department said Friday US import prices fell by 0.5% in February after inching up by a revised 0.1% in January. The drop in import prices came as prices for fuel imports plummeted by 7.7% in February after falling by 0.6% in January, with petroleum prices leading the way lower.

The University of Michigan’s preliminary US consumer sentiment index fell to 95.9 from 101 in February, according to data released Friday that slightly exceeded estimates in Bloomberg’s survey of economists. The composition showed the future expectations index fell more steeply, dropping 6.8 points to 85.3, than current conditions, down 2.3 points to 112.5.

Baker Hughes reported that the number of oil and gas rigs in the US fell last week by 1 to 792, with the total oil and gas rigs clocking in at 234 fewer than the same period last year.

The number of oil rigs increased for the week, by 1 rig, according to Baker Hughes data, bringing the total to 683—a 150-rig loss year over year.

The total number of active gas rigs in the US fell by 2 according to the report, to 107. This compares to 193 a year ago. The miscellaneous rig count stayed the same this week, for a total of 2 miscellaneous rigs.

Day ahead

Chinese industrial production and retail sales data for January and February are expected to be out around 10:00 am Beijing time.