Macro Roundup (May 16)

SHANGHAI, May 16 (SMM) – This is a roundup of global macroeconomic news last night and what is expected today.

Last night

The US dollar rebounded to a four-month high of 93.46, and closed at 93.25 last night as the US Treasury yield climbed up and its retail sales data met the expectation. Most LME base metals dipped as the US dollar strengthened. Lead dropped nearly 1.2%. LME copper fell over 1% as inventories grew across LME warehouses. Tin inched down, nickel remained flat, while aluminium and zinc rose slightly. Buoyed by positive economic data from China, SHFE metals, except for copper and lead, mostly edged up. 

In China, April's value-add of industrial enterprises above a designated size rose 7% year on year, more than the expected 6.4%, and March's 6%. The value for the first four months of the year grew 6.9% from the same period last year, up from the expected 6.7% and the previous value 6.8%.

China's retail sales of consumer goods in April went up 9.4% from last year, below March's 10.1%. The figure for the first four months of the year rose 9.7% year on year, slightly down from the previous 9.8%.

The urban investment in fixed assets for the first four months of the year gained 7% year on year. The growth rate hit a record low from the same period in 1999. It was down from the expected 7.4% and the previous 7.5%.

The eurozone gross domestic product (GDP) for the first quarter edged up 0.4% from the previous quarter, and up 2.5% from same period last year. Both remained flat from expectations. The Germany ZEW economic sentiment index in May held at -8.2 in May, flat from expectation and the value in April. May's ZEW economic sentiment index in the eurozone stood at 2.4, higher than April's 1.9.

The US retail sales in April rose 0.3% from March, in line with expectations. April's retail sales excluded automobile that went up 0.3% from March, down from the expected 0.5%. April's retail sales, excluding cars and gasoline, rose 0.3% month on month, lower from the expected 0.4%.

Retail sales in the US grew moderately in April. Although rising gasoline prices eroded disposable income levels, consumer spending accelerated after a sharp slowdown in the first quarter. Car sales rose 0.1% in April, far behind the 2.1% in March. Restaurant and bar sales fell 0.3%, the largest decline since February 2017. In addition, Americans spent less on entertainment.

US crude oil inventories during the week ended May 11 increased 4.85 million barrels, up from the previous decline of 1.85 million barrels, according to data from the American Petroleum Institute (API). API gasoline inventories for the week shank by 3.37 million barrels, compared with the previous decline of 2.06 million barrels. 

Crude inventories are 2.4% below the five-year norm, while Cushing stockpiles are about 30.5% below the average, according to financial news aggregator Zero Hedge. The many shale wells that have been drilled but remain uncompleted and the potential for rising output have weighed on American prices, said Walter Zimmermann, chief technical analyst at ICAP Technical Analysts.

Day ahead

Key factors to watch today include the eurozone consumer price index (CPI) in April, the US industrial productivity in April, and the Energy Information Administration’s (EIA) weekly crude oil inventory. 

The US dollar is expected to hover at highs while base metals are likely to trade rangebound with downward room as the dollar strengthens and inventory pressure lingers.

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