Macro Roundup (Nov 27)

SHANGHAI, Nov 27 (SMM) — This is a roundup of global macroeconomic news last night and what is expected today.

The dollar was on the defensive on Thursday as downbeat U.S. economic data and optimism about coronavirus vaccines prompted investors to seek out riskier assets tied to global commodities and emerging markets.

The British pound traded near a more than two-month high against the dollar as investors awaited details on trade talks between Britain and the European Union this week.

The dollar’s fall has been so rapid that it could rebound in the short term, market watchers said, but some investors still expect a decline over the longer term as they shift positions in expectation that the coronavirus outbreak will wane next year.

“A China-led recovery in the global economy and commodities should benefit commodities currencies,” said Masafumi Yamamoto, chief currency strategist at Mizuho Securities in Tokyo.

“The outlook is good, but we are reaching levels where authorities might feel some concern. Other emerging market currencies with good fundamentals should benefit.”

Oil rose for a fifth day on Thursday as a surprise drop in crude inventories extended a rally driven by hopes that vaccines would end the coronavirus pandemic and revive fuel demand.

Brent was up by 20 cents, or 0.4%, at $48.81 a barrel, after rising around 1.6% in the previous session. West Texas Intermediate crude was up by 14 cents, or 0.3%, at $45.85, having gained 1.8% on Wednesday.

Both benchmarks have risen about 9% this week, getting a boost after AstraZeneca said on Monday its Covid-19 vaccine could be up to 90% effective, adding to the potential armory to end the worst pandemic in a century.

U.S. oil stockpiles fell 754,000 barrels last week, data showed, while analysts in a poll had predicted a 127,000-barrel rise. Stockpiles at the Cushing, Oklahoma delivery point for WTI, fell 1.7 million barrels.

But gasoline demand for the week fell by 128,000 barrels per day (bpd) to 8.13 million bpd, the lowest since June.

Gold prices rose on Thursday as grim U.S. jobs data and worries over surging Covid-19 cases worldwide cast doubts over a quick economic recovery and bolstered the metal’s safe-haven appeal.

Spot gold rose 0.3% to $1,811.31 per ounce by 0324 GMT. U.S. gold futures were up 0.2% to $1,808.70.

U.S weekly jobless claims rose for the second straight week, data on Wednesday showed, undermining the recovery in the labor market amid rising coronavirus cases and business restrictions.

“The (jobs) data clearly highlighted the divergence between positivity driven by the vaccine and the near-term COVID-19 issue,” said Stephen Innes, chief global market strategist at financial services firm Axi, noting that the report also boosted the chances for further stimulus.

“The vaccine narrative has watered down gold’s appeal immensely and it will continue too until we finally move from a deflationary world into an inflationary world,” Innes added.

Euro Area Business Climate Indicator for November, Euro Area Consumer Confidence for November and Euro Area Prosperity Index for November will be released today.