Macro Roundup (Oct 29)

SHANGHAI, Oct 29 (SMM) – This is a roundup of global macroeconomic news last weekend and what is expected today.

Last weekend

The US dollar followed Wall Street lower on Friday, falling from highs earlier in the day after third-quarter GDP data performed stronger than expected. 

Both LME and SHFE base metals ended in mixed performance on Friday night with LME nickel being the biggest loser, down 2.5% on the day. LME tin slid 0.4%, lead lost 0.35% and copper slipped 0.25% while zinc gained 0.15% and aluminium rose by 0.8%.

SHFE zinc increased by over 1%, lead advanced 0.6% while copper edged down close to 0.2%, aluminium dropped 0.25%, tin fell by close to 0.3% and nickel slumped some 1.6%.

The US economy slowed less than expected in the third quarter as a tariff-related drop in soybean exports was partially offset by the strongest consumer spending in nearly four years. This kept growth on track to hit the Trump administration’s target of 3% this year.

GDP increased at an annualised rate of 3.5%, also supported by a surge in inventory investment and solid government spending, the Commerce Department said on Friday in its first estimate of third-quarter GDP growth. Economists had expected the economy to expand by 3.3%.

The department said that the personal consumption expenditures (PCE) price index, a key measure of inflation, increased by 1.6% last quarter, much less than the expected increase of 2.2%.

Consumer spending, which accounts for more than two thirds of US economic activity, grew by 4% in the third quarter, the strongest since the fourth quarter of 2014. The strong rise in consumer spending helped offset a 7.9% decline in business spending. That was the biggest quarterly decline in business spending since the first quarter of 2016.

Profit growth at China's industrial firms slowed for the fifth consecutive month in September as sales of raw materials and manufactured goods further ebbed, pointing to cooling domestic demand in the world's second-biggest economy.

China’s industrial profits rose 4.1% in September from a year ago to 545.5 billion yuan ($78.6 billion), slower than the 9.2% increase in August, according to the National Statistics Bureau on Saturday.

Profit for the first nine months increased by 14.7% from a year ago to 4.97 trillion yuan, driven by earnings of companies producing steel, building materials, oil and petrochemicals, according to the statistics bureau. Compared with the first eight months of the year, the profit growth slowed by 1.5 percentage points.

Earnings in September were mainly pressured by a greater slowdown in production and sales, declining price growth, as well as a high statistical base a year earlier, He Ping of the statistics bureau said.

Consumers in Germany remained in a spending mood in spite of a recent dampening of the country's macroeconomic prospects, according to a study published Friday by the GfK market research institute.

GfK’s forward-looking confidence index is expected to stay at 10.6 points in November, unchanged from October. 

US consumer sentiment for October was weaker than anticipated in the latest survey result, although the index remained near historically high levels.

The University of Michigan's monthly survey of consumers hit 98.6 in the final reading of October, below the 99 expected by economists. The key economic indicator hit 100.1 in September's final reading.

The total count of drilling rigs in the US inched up by 1 to 1,068 for the week ended October 26 after rising by 4 in the previous week, according to the latest weekly survey from Baker Hughes.

Oil rigs in the US gained 2 to 875 while gas rigs fell by 1 to 193; no rigs were classified as miscellaneous.

Day ahead

Economic data slated for release today include Germany’s retail sales, US PCE price index and personal spending for September.