SHANGHAI, Aug 28 (SMM) – This is a roundup of global macroeconomic news last night and what is expected today.
The US dollar slumped to the lowest in four weeks at 94.76 while the Mexican peso climbed higher after the two countries reached a preliminary trade deal that could replace the North American Free Trade Agreement (NAFTA).
SHFE base metals inched down for the most part. Zinc fell 0.49%, aluminium lost 0.44%, nickel and copper closed slightly lower, while tin gained 0.3%, and lead nudged up.
China’s profits across industrial enterprises above the designated size rose 16.2% from a year ago, to 515.12 billion yuan in July. This compared with June’s growth of 20%. A lower ex-works price and a higher purchasing price for industrial producers lowered growth in profit last month. From January to July, profits of industrial enterprises above the designated size grew 17.1% from last year.
Among the industrial enterprises above designated size, state-owned enterprises registered a total profit of 1,191.32 billion yuan from January to July, up 30.5% year on year. Joint-stock industrial enterprises registered a profit of 2,780.1 billion yuan during the first seven months, up 21.3% from last year.
By the end of July, assets of industrial enterprises above the designated size totalled 110.1 trillion yuan, up 7.4% year on year; total owner's equity for those enterprises was 47.8 trillion yuan, up 8.6% year on year. Their asset-liability ratio stood at 56.6% at the end of July, down 0.5 percentage point from the same time last year. Among them, state-owned holding companies saw their asset-liability ratio at 59.4%, down 1.3 percentage point year on year, marking the lowest level since 2016.
The Munich-based Ifo economic institute said that the German business climate index, based on a monthly survey of companies, rose to 103.8 this month from 101.7 in July. The reading exceeded the expected 101.8.
Businesses assessed the current situation to be slightly better, with the sub-index up to 106.4 from 105.3, compared to expectations for 105.3.
The business expectations index, which measures attitudes towards business prospects over the next six months, jumped to 101.2 from 98.2 last month.
The German economy performed robustly with expected GDP growth of 0.5% in the third quarter, according to Ifo. A cease-fire with the US in trade conflicts also contributed to the business confidence, the institute believes.
Market participants should monitor developments such as Germany’s actual monthly retail sales in July, US wholesale inventories in July, and its Conference Board (CB) consumer confidence index for August.