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Macro Roundup (Mar 8)

iconMar 8, 2018 10:48
Source:SMM
Macro Roundup

SHANGHAI, Mar 8 (SMM) – This is a roundup of global macro-economic news last night and what is expected today.

Last night

The base metals fell across the board as US dollar rebounded and as the trade war brews. SHFE aluminium and lead slid over 1%, copper dropped close to 1%, while LME lead lost over 2% and aluminium fell close to 2% to a three-month low.

China's foreign-exchange reserves in February stood at $3.13 trillion, down 0.85% month on month, due to declines in non-dollar currencies against the greenback and rebounds in asset prices.

The eurozone’s gross domestic product (GDP) in the fourth quarter stood at 2.7% year on year, maintaining the fastest growth pace in 10 years for a second quarter.

The US ADP payrolls in February rose by 235,000, which will give limited support to the US dollar as weak salary increase resulted from full employment has prevented inflation from reaching the target by the Federal Reserve Board.

In addition, investors are bearish on the greenback as a possible trade war looms. The resignation of White House economic advisor Gary Cohn exacerbated the sentiment.

The US trade deficit in January rose for five consecutive months to a new high since October 2008, at $56.6 billion. The deficit is expected to widen as US importers are likely to benefit from the demand boom thanks to the tax reform, and as the possible heavier tariffs on industrial raw materials increase the costs of export products.

Inventories of US crude oil during the week ended March 2 rose by 2.41 million barrels, according to the Energy Information Administration (EIA). Gasoline inventories shrank by 788,000 barrels and refined oil inventories fell by 684,400 barrels.

Day ahead

China’s trade balance data, the interest rate decision in the eurozone, and new claims for jobless benefits in the US are three key factors to watch today.

With the threat from a trade war, the US dollar is likely to stay rangebound with a downward room, and base metals are also likely to edge down in the short term.

 


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