Macro Roundup (Jun 19)

SHANGHAI, Jun 19 (SMM) – This is a roundup of global macroeconomic news last night and what is expected in the day ahead.

The US dollar extended its increase on Thursday as worries about a rise in new coronavirus cases and a second wave of the pandemic increased demand for safe-haven currencies.

A surge in new infections in several US states and the imposition of travel curbs in Beijing to stop a new outbreak made people especially concerned about the dangers of reopening the economy too fast before a vaccine is found.

Overnight, LME and SHFE base metals closed higher for the most part, with LME zinc led the increases with a rise of 1.21%. Copper edged up 0.09%, nickel climbed 0.51%, lead rose 0.28%, while aluminium fell 0.47% and tin slipped 0.27%.

SHFE copper increased 0.6%, zinc added 1.2%, lead expanded 0.38%, nickel advanced 0.21%, while aluminium shed 0.65% and tin dipped 0.29%. Rebar went up 0.39% and stainless steel gained 2.94%.

On the data front, the US weekly jobless claims stayed above 1 million for the 13th consecutive week as the coronavirus pandemic continued to hammer the US economy.

First-time claims totaled 1.5 million last week, higher than the expectation of 1.3 million. The government report’s total was 58,000 lower than the previous week’s 1.566 million, which was revised up by 24,000.

The elevated claims number persists even as all states have reopened to varying degrees and nonfarm payrolls grew by 2.5 million in May. Before the coronavirus, the record for a single week was 695,000 in September 1982.

The report also showed that the four-week moving average, a method to iron out data volatility, decreased by 234,500 to reach 1.8 million.

The Bank of England (BOE) announced its latest plans for the country’s base rate on Thursday. It kept interest rates at 0.1%, a record low, and voted by a majority of 8-1 to increase the government bond-buying by an additional £100 billion, taking the total stock of asset purchases to £745 billion. 

"There are signs of consumer spending and services output picking up, following the easing of Covid-related restrictions on economic activity," it said in the statement. 

"Recent additional announcements of easier monetary and fiscal policy will help to support the recovery. Downside risks to the global outlook remain, however, including from the spread of Covid-19 within emerging market economies and from a return to a higher rate of infection in advanced economies."

Key economic data slated for release today include the US weekly M1 money supply and its current account for the Q1, as well as the Germany producer price index (PPI) for May and the eurozone current account by end-April.