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Macro Roundup (Oct 26)
Oct 26,2018 08:37CST
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Source:SMM
Macro Roundup

SHANGHAI, Oct 26 (SMM) – This is a roundup of global macroeconomic news last night and what is expected today.

Last night

The US dollar strengthened as the euro and pound slipped on Thursday after the European Central Bank (ECB) kept interest rates unchanged in their October policy meeting.

The interest rate on the main refinancing operation, the marginal lending facility, and the deposit facility sit at zero, 0.25% and -0.40% respectively. The expectation is that these rates will remain at their present levels at least through the summer of 2019.

Net asset purchases by the ECB stand at a monthly pace of 15 billion euros until the end of December, when the central bank has said the purchasing will stop.

LME base metals, except for copper, ended in negative territory across the board overnight. Lead dipped 0.05%, tin slid 0.1%, nickel lost 0.25%, zinc fell by 0.6% and aluminium slipped 0.7%.

SHFE base metals ended in mixed performance overnight. Copper climbed over 0.8%, lead advanced 0.74% and tin nudged up 0.04% while aluminium stayed flat, zinc dropped 0.43% and nickel sank 0.6%.

Sentiment among German firms weakened further this month. The Ifo business climate index fell to 102.8 points in October from 103.7 points in September. Firms were less satisfied with their current business situation and less optimistic about the months ahead. Growing global uncertainty is increasingly taking its toll on the German economy.

Orders to US factories for big-ticket manufactured goods slowed significantly in September, while a key category that tracks business investment fell for a second straight month.

The commerce department saysthat demand for durable goods edged up 0.8% in September, a sharp slowdown from an upwardly revised 4.6% jump in August. The swing was heavily influenced by the volatile aircraft category, which fell 17.5% in September after it surged 63.7% in August.

The category that serves as a proxy for business investment dipped 0.1% in September following a 0.2% fall in August. The recent weakness in investment orders raised concerns about whether a growing trade war with China, and stock market volatility were making businesses more cautious.

The US trade deficit in goods widened for a fourth straight month in September, bringing it to $76 billion, according to the Census Bureau.

Exports grew by 1.8% from August to September, from $138.4 billion to $140.95 billion. Imports expanded by 1.5% to $217 billion from $213.9 billion.

Wholesale inventories grew by 0.3% to $644.1 billion in September from $642 billion in August.

New applications for US unemployment aid rose last week, but the number of Americans receiving benefits fell to more than a 45-year low, pointing to tightening labour market conditions.

Initial claims for state unemployment benefits increased 5,000 to a seasonally adjusted 215,000 for the week ended October 20, the Labor Department said on Thursday. The Labor Department said that claims for North and South Carolina continued to be affected by Hurricane Florence, while Hurrican Michael affected claims for Florida and Georgia.

Thursday's claims report also showed the number of people receiving benefits, after an initial week of aid, dropped 5,000 to 1.64 million for the week ended October 13, the lowest since August 1973.

US pending home sales rose slightly in September, but contract signings are depressed from a year ago as affordability has become a greater challenge for potential buyers.

The National Association of Realtors said on Thursday that its pending home sales index increased 0.5% last month to 104.6. But over the past year, this metric declined 1%.

Day ahead

Economic data slated for release today include Germany’s Gfk consumer confidence for November, US gross domestic product (GDP), personal consumption expenditures (PCE) price index and personal consumption for the third quarter as well as the University of Michigan's consumer sentiment index for October.

Macroeconomics

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