SHANGHAI, Nov 6 (SMM) – This is a roundup of global macroeconomic news last night and what is expected today.
The US dollar lost ground against most of major currencies on Monday, as growing expectations of an orderly Brexit bolstered the pound, euro and global investor sentiment. The dollar closed at 96.32. This was ahead of the US midterm elections on November 6 that many analysts say will set the trend for the greenback, and all of the global currency market.
LME base metals fell across the board while SHFE contracts closed mixed. LME lead led the losses and settled 3.64% lower, copper lost 1.95%, nickel fell 1.63%, zinc dipped 0.99%, aluminium slid 0.63%, and tin edged down. SHFE aluminium grew 0.39%, zinc jumped 0.3%, while nickel fell 0.74%, and tin declined 0.6%. Lead, copper, and rebar dipped.
China's Caixin services purchasing managers' index (PMI) fell to 50.8 in October from 53.1 in September, the lowest since September 2017, and edged closer to the 50 line that separates growth from contraction.
Commenting on the China General Services PMI data, Dr Zhengsheng Zhong, director of macroeconomic analysis at CEBM Group said: "The subindex for new business dropped to its lowest point since November 2008, despite staying in expansionary territory, indicating an obviously weakening demand for services. The employment subindex returned to positive territory following a drop in the previous month. The subindex for prices charged by service providers also returned to positive territory, while the one for input costs dropped despite staying in positive territory, suggesting easing pressure on company profit margins. The subindex for business expectations, which gauges services providers' confidence toward operation prospects over the next 12 months, edged down mildly.
"The Caixin China Composite Output Index dipped to 50.5 in October from the previous month, reaching its lowest level since June 2016, indicating mounting downward pressure on China’s economy. The subindex for new orders fell, pointing to softening overall demand conditions. The employment subindex edged up despite staying in negative territory, which could possibly be due to government efforts to stabilise the labour market. The subindex for input costs remained unchanged from the month before, while the one for output charges inched up, indicating easing pressure on company profit margins — though upward price pressure remained. The subindex for future output edged down, reflecting weakening confidence among companies.”
The eurozone Sentix investor confidence dropped to 8.8 in November, down from 11.4. Sentix noted "The problem areas in Europe and the global economy remain largely the same, which does not make it any better. Germany's weakness is also weighing on the euroland economy." Also, "the eurozone economy passed its zenith in January. Since then, economic expectations have reversed and since April they have been negative."
The US Institute for Supply Management (ISM) non-manufacturing PMI came in at 60.3, down 1.3 from the September reading of 61.6.
"The non-manufacturing sector has again reflected strong growth despite a slight cooling off after a record month in September," Anthony Nieves, chair of the ISM non-manufacturing business survey committee. "There are continued concerns about capacity, logistics and tariffs. The respondents are positive about current business conditions and the economy."
The IHS Markit will release its October service final PMI for Germany and the eurozone. The eurozone will also release its producer price index (PPI) for September. The US mid-term elections will be a key development to monitor tonight.