SHANGHAI, May 7 (SMM) – This is a roundup of global macroeconomic news last weekend and what is expected today.
Last weekend
The US dollar index surged and hit a four-month high at 92.90 last Friday, given the upbeat economic outlook, despite the nonfarm payrolls came out below expectation.
Most base metals rose as the US-China trade negotiations made some progress. LME aluminium jumped 2.6% and hit a two-week high. LME zinc gained 1.9%, rebound from a nine-month low with the recovery of risk appetite. LME lead closed 1.9% higher with nickel slightly up, but copper and tin dipped. SHFE metals also rose across the board except for tin following the strong performance of their LME peers.
China’s Caixin services purchasing managers’ index (PMI) climbed to 52.9 in April from March’s four-month low of 52.3 as new business and employment grew at a faster rate. The 50-mark separates growth from contraction. The composite PMI covering both the manufacturing and services sectors also rose to 52.3 in April from the previous month’s 51.8, indicating a relatively stable economic growth.
The retail sales in the eurozone grew 0.1% month on month in March, much slower than the expected 0.5% and the previous month’s 0.3% after revision. Its year-on-year growth stood at 0.8%, also lower than the expected 1.9% and the previous 1.8%. A declining demand for non-food items mainly contributed to the sharp slowdown in retail sales growth in March, particularly in clothing and pharmaceutical goods.
The US nonfarm payrolls increased by 164,000 in April, missing the expectations of 192,000.
The unemployment rate fell to 3.9% in April, an 18-year low, compared to the expected 4% and March’s 4.1%. This rate is not far from the Federal Reserve Board's forecast of 3.8% by the end of this year.
The closely-watched average hourly earnings rose 0.1% month on month in April, lower than the expected 0.2% and March’s 0.3% after downward revision. This equates to a year-on-year growth of 2.6%, lower than the expected 2.7% and in line with the previous rate after being downwardly revised from 2.7%.
The number of active US rigs for oil grew 9 units to 834 units over the week ended May 4. This marked five consecutive weeks of gains. Natural gas rigs increased 1 unit to 196 units, according to data from Baker Hughes.
Day ahead
Key factors to watch today include China’s foreign exchange reserves in April and the eurozone’s Sentix investor confidence index in May.
The US dollar is likely to remain rangebound at highs today with upbeat economic outlook.
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