Macro Roundup (May 4)

SHANGHAI, May 4 (SMM) – This is a roundup of global macroeconomic news last night and what is expected today.

Last night

The US dollar index traded rangebound around 92.4 overnight, buoyed by the upbeat economic data. The market was also looking more cues from US-China trade talks.

Most LME metals fell, but copper rebounded and hit a weekly high as inventories declined. LME zinc tumbled 1.3% to a low since September last year, aluminium closed 1.6% lower, and lead and nickel edged down slightly. SHFE metals fell across the board except for tin and lead. SHFE zinc slumped close to 2% and nickel dropped close to 1%.

The eurozone’s consumer price index (CPI) rose 1.2% year on year in April, slower than 1.3% a month ago, missing expectations of 1.3%. Meanwhile, the core CPI rose 0.7% year on year, also slower than the previous 1% and the expected 0.9%, due to a slowdown in the growth of service prices.

The eurozone’s producer price index (PPI) in April rose 0.1% month on month and 2.1% year on year, both in line with forecasts.

The US weekly initial claims for unemployment benefits rose 2,000 to 211,000 over the week ended April 28, but the rise was smaller than expectation.

The four-week moving average of initial claims, viewed as a better measure of the labour market trend, fell 7,750 to 221,500 last week, the lowest level since March 1973. This continued to signal a tightening labour market.

The Federal Reserve Board on Wednesday said the economic activity is expected to “expand at a moderate pace in the medium term and labour market conditions will remain strong.”

The US trade deficit in March narrowed 15.2% to $49 billion, the lowest level since September, as exports increased to a record high amid a surge in deliveries of commercial aircraft and soybeans. March's figures also ended six straight months of increases in trade deficit.

In March, exports of goods and services increased 2% to an all-time high of $208.5 billion. The country’s trade deficit with China dropped 11.6% to $25.9 billion.

The US ISM nonmanufacturing purchasing managers’ index (PMI) fell to 56.8 in April from 58.8 in March, below expectations at 58.1.

The US March factory goods orders rose 1.6% month on month, unchanged from the level seen in February after revision, but better than the expected 1.4%.

The US durable goods orders rose 2.6% month on month in the final March reading.

Day ahead

Key factors to watch today include China’s Caixin services PMI in April, the US nonfarm payrolls, the unemployment rate, average hourly earnings, and the labour force participation rate in April.

The US dollar and base metals are likely to see bouts of volatility today as US-China trade negotiations enters its second day.

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