SHANGHAI, Sept 7 (SMM) – This is a roundup of global macroeconomic news last night and what is expected today.
The US dollar index fell below 95, against a basket of six major currencies. This followed after St Louis Federal Reserve Bank President James Bullard said on Wednesday that the US Federal Reserve should hold off on further interest rate hikes because the stance of monetary policy is already at neutral or possibly restrictive. Concerns about new US trade tariffs on China also cast a shadow on the market.
Base metals saw mixed trades. LME zinc grew 0.87%, tin gained 0.53%, and copper increased 0.44%. SHFE zinc jumped 1.45%, copper rose 0.44%, lead and tin inched up. Other base metals closed slightly lower.
The US created a seasonally adjusted 163,000 private-sector jobs in August, payrolls processor ADP said Thursday, down from 217,000 in July. That’s the smallest growth since October, compared with the expected 190,000 new jobs.
"Although we saw a small slowdown in job growth the market remains incredibly dynamic," said Ahu Yildirmaz, vice-president and co-head of the ADP Research Institute. “Mid-sized businesses continue to be the engine of growth, adding nearly 70% of all jobs this month, and remain resilient in the current economic climate.”
"The job market is hot," said Mark Zandi, chief economist at Moody's Analytics. "Employers are aggressively competing to hold onto their existing workers and to find new ones. Small businesses are struggling the most in this competition, as they increasingly can't fill open positions."
The number of Americans filing for unemployment benefits fell to near a 49-year low last week, suggesting sustained strength in the labour market that should continue to underpin economic growth.
Initial claims for state unemployment benefits dropped 10,000 to a seasonally adjusted 203,000 for the week ended Sep 1, the lowest since December 1969. The four-week moving average of initial claims, considered a better measure of the labour market trends as it factors out week-to-week volatility, fell 2,750 last week to 209,500, also the lowest since December 1969.
Economists said that employers were reluctant to lay off workers in the the tight labour market. The labour market is close to, or at full, employment.
The US Institute for Supply Management’s (ISM's) non-manufacturing index rose in August by 2.8 to 58.5, higher than expectations of a more moderate rise to 56.8. Seven of the 10 sub-components rose in the month. The report came in mostly positive, provising credence to the view that the US economy remains at the "top of its game", noted TD Economics in a research report.
The US crude oil inventories fell 4.3 million barrels in the week to Aug 31, compared with expectations for a decrease of 2.9 million barrels, according to the Energy Information Administration (EIA). The decline brought stockpiles to 401.49 million barrels, the lowest since February 2015.
Market participants should monitor data including the US nonfarm payroll employment in August, China’s foreign exchange reserves, and the eurozone's gross domestic product (GDP) for the second quarter.