Macro Roundup (Sep 14)

Data Analysis 08:44AM Sep 14, 2018 Source:SMM

SHANGHAI, Sep 14 (SMM) – This is a roundup of global macroeconomic news last night and what is expected today.

Last night

The US dollar fell to low in one and a half months against a basket of currencies after data showedthat US consumer prices increased less than expected in August, paring traders' outlook that domestic inflation is accelerating. Signs of eased trade tension between China and the US, with the potential trade negotiations, also pressured the greenback.

Base metals closed mixed as LME zinc led losses and fell 1.61%. LME aluminium lost 0.63%, SHFE zinc slid 0.63%, copper dipped 0.37%, while aluminium grew 0.45%, and LME lead inched up. 

The European Central Bank’s (ECB) 25-member governing council said that it was holding its benchmark refinancing rate at a record low of zero. The ECB also announced plans to keep interest rates unchanged at a historic low at least through next summer. 

The bank also confirmed that it was halving its monthly bond purchases from €30 billion to €15 billion from October to December, when the quantitative easing scheme is due to end.

The ECB sees 2018 gross domestic product (GDP) growth at 2%, compared with a 2.1% rise expected in June. It also expects 2019 GDP growth at 1.8% versus 1.9% seen in June, and 2020 GDP growth at 1.7%, unchanged from that expected in June.

The US consumer price index (CPI) increased 0.2% last month after a similar gain in July. In the 12 months through August, the CPI rose 2.7%, slowing from July's 2.9% rise.

Excluding the volatile food and energy components, the CPI edged up 0.1%. The so-called core CPI had increased 0.2% for three straight months. In the 12 months through August, the core CPI grew 2.2% after rising 2.4% in July. 

The number of Americans applying for unemployment benefits dipped unexpectedly last week, to its lowest level in nearly 49 years, reflecting a robust labour market.

Initial claims for state unemployment benefits fell 1,000 to a seasonally adjusted 204,000 for the week ended September 8. Data for the prior week was revised to show 2,000 more applications received than previously reported.

Day ahead

Market participants should monitor data such as the US retail sales for August, the University of Michigan consumer confidence index for September, and China’s total retail sales of consumer goods last month. 

Key Words:  Macroeconomics