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Macro Roundup (Sep 25)
Sep 25,2018 08:49CST
data analysis
Macro Roundup

SHANGHAI, Sep 25 (SMM) – This is a roundup of global macroeconomic news last weekend and what is expected today.

Last weekend

The US dollar index nudged up overnight as investors searched for fresh clues before a widely expected interest rate hike by the US central bank this week.

LME base metals, except for zinc, fell across the board on Monday. Tin edged down 0.07%, lead shedded 0.56%, copper lost 0.62%, aluminium dropped 1.8%, nickel slumped 3.4%. The SHFE market closed overnight for public holidays.

The Eurozone manufacturing purchasing managers index (PMI) dropped to 53.3 in September while services PMI edged higher to 54.7 versus 54.4 last, the latest economic activity survey from IHS Markit research showed.

Chris Williamson, Chief Business Economist at IHS Markit, said, “A near stagnation of exports contributed to one of the worst months for the Eurozone economy for almost two years. Trade wars, Brexit, waning global demand (notably in the auto industry), growing risk aversion, destocking and rising political uncertainty both within the Eurozone and further afield all fuelled the slowdown in business activity.”

“Thankfully, the slowdown was limited to manufacturing. A buoyant service sector, boosted in part by domestic demand being supported by strong job gains, means the survey data are running at a level indicative of the economy growing by a solid 0.5% in the third quarter,” Williamson added.

IHS Markit also reported that German manufacturing PMI dropped sharply in September, coming in at 53.7 while services PMI jumped to eight-month highs of 56.5 versus 55 last.

“The service sector was left to do most of the heavy lifting in September, as manufacturing put in its worst overall performance since August 2016. Service providers enjoyed the biggest boost to new business in over seven years in a further sign of strong domestic demand. Manufacturing new orders, however, were broadly flat as export sales declined for the first time in more than three years,” Phil Smith, Principal Economist at IHS Markit, said.

He added, “Manufacturers’ confidence took a big hit in September, deteriorating to its lowest for almost four years. Goods producers foresee output barely rising over the next 12 months and have cited growing uncertainty towards the outlook.”

IHS Markit said in its latest flash September PMI manufacturing for the US improved to a reading of 55.6 from August’s reading of 54.7. This was better than the expected reading of 55.

“With storms hitting the east coast, it was no surprise to see some disappointing survey data in September, with the flash PMI indicating that the pace of economic growth slipped to its lowest for almost one-and-a-half years,” said Chris Williamson. “However, business activity remained encouragingly resilient during the month, commensurate with third-quarter GDP growing at an annualised rate approaching 3%.”

Day ahead

Market participants today should monitor US Federal Housing Finance Agency (FHFA) home prices for July and the Conference Board consumer confidence for September.


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