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Macro Roundup (Oct 18)
Oct 18,2018 08:59CST
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Macro Roundup

SHANGHAI, Oct 18 (SMM) – This is a roundup of global macroeconomic news last night and what is expected today.

Last night

The US dollar gained on Wednesday as stocks dipped, boosting demand for safe haven currencies, after the Federal Reserve released minutes from its September meeting. Minutes showed that officials believed the central bank should continue to increase interest rates to ensure a stable economy.

"With regard to the outlook for monetary policy beyond this meeting, participants generally anticipated that further gradual increases in the target range for the federal funds rate would most likely be consistent with a sustained economic expansion, strong labor market conditions, and inflation near 2% over the medium term," the minutes read.

LME base metals, except for zinc, ended in negative territory across the board on Wednesday. Lead dropped close to 1.5%, nickel slid some 1.4%, aluminium slipped 0.7%, tin lost 0.26% and copper edged down 0.2%.

SHFE base metals ended in mixed performance overnight. Zinc surged over 2%, copper and tin nudged up while lead sank more than 0.5%, aluminium fell some 1.2% and nickel decreased about 1.4%.

China's total social financing (TSF), a broad measure of credit and liquidity in the economy, rose to 2.21 trillion yuan ($319.08 billion) in September from 1.52 trillion yuan in August, data from the central bank showed on Wednesday.

TSF includes off-balance sheet forms of financing that exist outside the conventional bank lending system, such as initial public offerings, loans from trust companies and bond sales.

The People's Bank of China (PBOC) revised the way it calculates TSF by adding local government special bonds issuance from September, which boosted growth rates.

Broad M2 money supply grew 8.3% in September from a year earlier, higher than the 8.2% in August, central bank data showed.

The data released on Wednesday showed Chinese banks extended 1.38 trillion yuan ($199.25 billion) in net new yuan loans in September, more than analysts had expected and up from the previous month.

Central bank governor Yi Gang said on Sunday that he continues to see plenty of room for adjustment in interest rates and the reserve requirement ratio (RRR), with significant downside risks from trade tensions with the US.

Eurozone inflation accelerated in September, in line with market expectations, driven by a spike in energy prices. Core inflation, which excludes energy and unprocessed food costs, edged lower, data showed on Wednesday.

The European Union's statistics office Eurostat said that consumer prices in the 19 countries sharing the euro rose 0.5% month on month in September for a 2.1% year-on-year rise.

Energy prices were the biggest single contributor to the year-on-year gain, adding 0.9 to the overall. Services added 0.57 and food, alcohol and tobacco added 0.51.

Excluding the volatile energy and unprocessed food prices, in what the European Central Bank calls core inflation, prices grew 0.3% month on month for a 1.1% year-on-year gain, slowing from 1.2% in August and 1.3% in July.

US crude stocks rose 6.5 million barrels in the week to October 12, the fourth straight weekly build, the Energy Information Administration (EIA) said.

Stocks at Cushing, the delivery hub for US crude futures, rose by 1.8 million barrels, the EIA said.

Gasoline stocks fell by 2 million barrels and distillate stockpiles, which include diesel and heating oil, fell by 827,000 barrels.

Day ahead

Some data to monitor today include US weekly jobless claims. Investors should also monitor a European summit of the heads of state and government of the European Union and a ASEM (Asia-Europe Meeting) summit in Brussels from October 17-19.


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