SHANGHAI, Sep 5 (SMM) – This is a roundup of global macroeconomic news last night and what is expected today.
The US dollar index rallied to the highest since August 21, at 95.73, and closed at 95.41. Concerns over an escalating trade conflict between the US and China battered emerging market currencies and prompted investors to seek safe harbour of the dollar.
Base metals, except for SHFE tin, fell across the board. LME lead led the losses and closed 2.9% lower. Nickel slumped 2.4%, zinc lost 2.3%, copper declined 1.8%, and aluminium dropped 1.3%. SHFE lead plunged 1.8%, zinc dipped 1.6%, nickel dipped 1.4%, and copper went down 1.3%. Other base metals closed slightly lower.
The US August purchasing managers' index (PMI) registered 61.3, an increase of 3.2 from the July reading of 58.1, the ISM announced on Tuesday. The reading beat the expected 57.6 and marked a high in 14 years.
"Comments from the panel reflect continued expanding business strength," Timothy Fiore, chair of the ISM manufacturing business survey committee. "Demand remains strong, with the new orders index at 60 or above for the 16th straight month, and the customers' inventories index remaining low."
However, export orders fell for the second straight month. This indicated that the persistent threat of a broader trade war continues to threaten recent gains.
The seasonally adjusted IHS Markit US manufacturing PMI slowed to 54.7 in August, down from 55.3 in July. This is the weakest improvement since last November.
"Exports remain the key source of weakness for producers, with foreign orders barely rising in August after two months of modest declines. The strongest growth is being seen in consumer-facing companies, reflecting robust domestic demand, in turn linked to the strong labour market and buoyant consumer confidence," said Chris Williamson, economist at IHS Markit.
The market should monitor key data today including China's Caixin service PMI for August, the eurozone retail sales, as well as the US trade balance in July.