Macro Roundup (Mar 7)

SHANGHAI, Mar 7 (SMM) – This is a roundup of global macro-economic news last night and what is expected today.

Last night

Markets were rattled following the resignation of White House economic advisor Gary Cohn. The US dollar declined and hovered at 89.4.

Base metals saw mixed trading. SHFE tin edged down while nickel rose over 1%. LME nickel jumped close to 2%, copper rose almost 1% while zinc touched a new low since December 2017 due to rising inventories. 

US factory orders in January shrank 1.4% month on month, the sharpest decline since July 2017, as manufacturers spent less on equipment and machinery.

But factory activity in February saw the biggest rise since May 2004, indicating that producers remain upbeat. 

SMM expects the largest tax cut in US history to jumpstart weak production but supply constraints and labour shortages may limit production. 

Inventories of US crude oil over the week that ended March, calculated by the American Petroleum Institute (API), rose by 5.66 million barrels. Gasoline inventories shrank by 4.54 million barrels and refined oil inventories increased 1.49 million barrels. The overall weak sentiment of the API data lowered oil prices. 

Day ahead

Some key factors to watch today include February data of China's foreign exchange reserves, the eurozone's fourth quarter GDP, the US ADP employment data for February, and the EIA crude oil inventory.

The US dollar faces resistance and is expected to remain rangebound in the short term. SHFE metals inched up and are also likely to trade rangebound.

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