Macro Roundup (Sep 28)

SHANGHAI, Sep 28 (SMM) – This is a roundup of global macroeconomic news last night and what is expected today.

Last night

The dollar notched the largest daily increase in close to seven weeks against a basket of other major currencies on Thursday, boosted by the Federal Reserve's outlook for more rate hikes beyond this year as well as a weakening of the euro on worries about the Italian budget.

Most LME and SHFE base metals ended in negative territory overnight. LME tin dipped 0.13%, zinc dropped 1.14%, aluminium lost 1.46%, copper fell 1.75%, nickel tumbled 2.11% while lead gained 0.74%. SHFE zinc edged down 0.25%, copper slid 0.91%, aluminum slipped 0.9%, nickel slumped 1.6% while lead nudged up 0.08% and tin increased 0.29%.

New industrial data for August suggests China’s industrial companies are coming under strain from the trade war with the US as profit growth decelerated for the fourth month in a row.

Industrial profits grew by 9.2% to 519.69 billion yuan ($75.57 billion) last month, with the growth rate down from 16.2% a month earlier, according to data published Thursday by the National Bureau of Statistics (NBS).

The European Commission on Thursday said its economic sentiment indicator for the eurozone--an aggregate measure of consumer and business confidence--fell to 110.9 in September from 111.6 in August in a ninth straight monthly drop that has brought it to its lowest level in more than a year.

The US economy grew as expected in the second quarter, according to a reading Thursday that confirmed that gross domestic product (GDP) rose at its quickest rate in nearly four years.

GDP, the broadest measure of how the economy is progressing, increased 4.2%, the Commerce Department's Bureau of Economic Analysis reported, marking the fastest pace since the third quarter of 2014.

The number of Americans filing for unemployment benefits increased more than expected last week likely as Hurricane Florence temporarily displaced some workers, but the underlying trend continued to point to a tightening labor market.

Initial claims for state unemployment benefits rose 12,000 to a seasonally adjusted level of 214,000 for the week ended September 22, the Labor Department said on Thursday.

Overall orders for US-made durable goods, items ranging from toasters to aircraft that are meant to last three years or more, surged 4.5% in August as demand for transportation equipment jumped 13%. That followed a 1.2% drop in durable goods orders in July.

With both home prices and mortgage rates continuing to rise, fewer consumers signed contracts to buy existing homes in the US in August.

So-called pending home sales fell 1.8% for the month, according to the National Association of Realtors' seasonally adjusted index. Sales were down 2.3% compared with August 2017. That was the fourth monthly decline in the past five months and the slowest sales pace since January.

Day ahead

Key economic data slated for release today include China’s September manufacturing activity, Germany’s September unemployment rate, the eurozone’s September consumer inflation and US  August personal consumption expenditures (PCE) inflation, personal income and spending and September consumer confidence.