SHANGHAI, Apr 24 (SMM) – This is a roundup of global macroeconomic news last night and what is expected today.

Last night

The US dollar index rose for five consecutive days to a seven-week high and towards 91 overnight as the US 10-year treasury yield inched closer to 3% and as the market raised their anticipation of four interest rates hikes this year. A cooler US-China trade tension also helped.

Base metals fell while aluminium tumbled. LME aluminium registered the biggest one-day decline in history and lost close to 10%, while SHFE aluminium dropped over 3%. This followed the US announcement on Monday that it would consider lifting the sanctions if Rusal’s major shareholder Oleg Deripaska ceded control of the company.

SHFE metals fell across the board except for zinc. Tin dropped 1.4%, nickel slid close to 1%, while copper dipped 0.62% and lead edged down.

The preliminary Markit manufacturing purchasing managers’ index (PMI) for Germany in April exceeded expectation and came in at 58.1, with services PMI up to 54.1 and composite PMI up to 55.3.

“Growth of Germany’s private sector steadied in April, to arrest the loss of momentum seen in February and March,” Phil Smith, principal economist at IHS Markit, said. “With both manufacturing and services seeing slightly quicker increases in output, the data show the economy making a solid start to the second quarter.”

The preliminary Markit PMI for eurozone in April fell to a 14-month low of 56, with services PMI up to 55 and composite PMI unchanged at 55.2.

"The eurozone economy remained stuck in a lower gear in April," said Chris Williamson, chief business economist at IHS Markit. "Growth has downshifted markedly since the peak at the start of the year, but importantly still remains robust.”

Williamson added that the observed slowdown was “neither surprising nor alarming”.

“Strong growth, as that seen at the start of the year, rarely persists for long, not least because supply fails to keep up with demand. With recent months seeing record delivery delays for inputs to factories and growing skill shortages, output is clearly being constrained,” he said.

The preliminary Markit PMI for the US rose to 56.5 in April from 55.6 in the final March readings, better than the expected 55.2. The services PMI rose to 54.4, better than the expected 54.1 and March’s 54, with the new business index registering a new high since March 2015. The composite PMI rose to 54.8 in April from 54.2 in March.

The US existing home sales came in at 5.6 million in March, better than the expected 5.55 million and February’s 5.54 million. The month-on-month increase stood at 1.1%, compared to the expected 0.2% and the previous 3%.

The home sales increased for a second straight month in March amid a rebound in activity in the US north-east and mid-west, but a dearth of houses on the market, higher prices and higher mortgage rates remain headwinds against the development of US property. The 30-year fixed mortgage rate was around 4.5% last week, the highest level since January 2014.

Day ahead

Germany’s IFO business climate index in April, the US Federal Housing Finance Agency (FHFA) home price index in February as well as the US Conference Board’s consumer confidence index in April are key factors to watch today.

Germany’s IFO business climate index is estimated to fall to 102.8 in April from the previous 114.7. The index is a monthly survey of the business climate in Germany, based on about 7,000 responses from firms across manufacturing, construction, wholesale and retail. 

The monthly rate of the US FHFA home price index is estimated to fall to 0.6 in February from the previous 0.8.

The US Conference Board’s consumer confidence index is forecast to fall to 126 in April from the previous 127.7.

The US dollar is likely to gain further support from the US economic data to be released today. Base metals are expected to trade weakly rangebound today.

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