Macro Roundup (Nov 9)

SHANGHAI, Nov 9 (SMM) – This is a roundup of global macroeconomic news last night and what is expected today.

Last night

The US dollar held on to earlier gains on Thursday as the Federal Reserve kept its monetary policy on hold and indicated further gradual rate hikes. 

Against a basket of six rival currencies, the dollar index inched up and closed at 96.67, surpassing levels earlier in the day prior to the Fed announcement. The Fed has raised rates three times this year and is expected to hike rates again before the end of 2018. 

Base metals closed mixed with SHFE contracts rising for the most part. SHFE lead surged 1.59%, tin jumped 0.92%, nickel rose 0.79%, zinc increased 0.37%, copper grew 0.04%, while aluminum lost 0.14%. LME lead also soared 3.81%, zinc gained 1.46%, tin rose 1.42%, while aluminium slid 0.23%, copper fell 0.18%, and nickel edged down. 

China Customs published China's trade balance for October, reporting a bigger-than-expected trade surplus as imports shrank significantly. 

China's trade balance for October came in at $34.01 billion, compared with the previous $31.70 billion. On a yearly basis, exports rose 15.6% in October, compared with a previous rise of 14.5%, and imports surged 21.4%, compared with a previous increase of 14.3%. 

In September, German exports dropped 0.8% month on month from a slightly upwardly revised 0.1% in August. At the same time, imports decreased by 0.4% in September, which narrowed the trade balance to €17.6 billion from €18.2 billion.

New applications for US unemployment dipped last week and the number of Americans receiving benefits remained at a 45-year low as the labour market continued to perform well.

Initial claims for state unemployment benefits dropped by 1,000 to a seasonally adjusted 214,000 for the week ended November 3, the Labor Department said on Thursday. Data for the prior week was revised to show 215,000 claims received, which was 1,000 more than previously reported.

The US Federal Reserve also voted to maintain the current benchmark interest rate.

The Federal Open Market Committee (FOMC) will keep the federal funds rate in a range of 2% to 2.25%, in line with market expectations. 

"We shouldn't be surprised by either comment as they are simply a summary of the recent data," Michelle Meyer, economist at the Bank of America Merrill Lynch, said in a note. "Interestingly, there was no mention of the softer housing data. Moreover, there was no mention of the sell-off in the stock market in October which implies that Fed officials were largely willing to shrug it off."

Day ahead

Key economic data to watch today include China’s consumer price index (CPI) and producer price index (PPI) for October, its social financing and M2 money supply for October, the US PPI in October, as well as the University of Michigan consumer sentiment index for November.