SHANGHAI, Dec 7 (SMM) – This is a roundup of global macroeconomic news last night and what is expected today.
Most LME and SHFE base metals ended in negative territory overnight. LME nickel slumped over 3%, aluminium dropped 1.6%, tin fell 1.2%, copper slid some 1% and zinc lost 0.4% while lead gained 0.4%.
SHFE nickel tumbled over 2%, aluminium slipped close to 0.9%, tin declined some 0.5%, copper decreased 0.4% and lead inched down 0.2% while zinc climbed 0.6%.
The US dollar weakened against major peers on Thursday as US Treasury yields tumbled and traders scaled back expectations on the number of rate hikes the Federal Reserve would implement amid weakening economic data and heightened market volatility.
The dollar has been under pressure this week as an inversion in part of the US yield curve raised a red flag for a potential recession.
The dollar took a hit on the news of the arrest in Canada of a top executive of Chinese tech giant Huawei prompted fears of a flare-up in the trade tensions between Beijing and Washington.
Fed policymakers are still widely expected to raise interest rates again at their December 18-19 meeting, but the market focus is on how many rate hikes will follow in 2019.
Atlanta Fed President Raphael Bostic on Thursday said the central bank may not have to go much further with interest rates to achieve a proper balance between slowing and overheating.
"I currently think we're within shouting distance of neutral, and I do think neutral is where we want to be," he said in remarks prepared for a speech at the University of Georgia. "I'm not seeing clear signs of overheating, nor am I seeing any indications of a material weakening in the macroeconomic data at the moment."
Data on Thursday also weighed on the greenback. The US trade deficit jumped to a 10-year high in October as soybean exports dropped further and imports of consumer goods rose to a record high, suggesting the Trump administration's tariff-related measures to shrink the trade gap likely have been ineffective.
The Commerce Department said on Thursday US trade deficit increased 1.7% to $55.5 billion, the highest level since October 2008. The trade gap has now widened for a five straight months. Data for September was revised to show the deficit rising to $54.6 billion instead of the previously reported $54.0 billion.
The goods trade deficit with China surged 7.1% to a record $43.1 billion in October.
Separately, data showed private employers hired fewer workers than expected in November, pointing to a moderation in the pace of job growth.
ADP and Moody's Analytics reported on Thursday that US private payrolls increased by 179,000, below the expected 195,000 growth. The number also was a drop from the downwardly revised 225,000 in October.
The number of Americans filing applications for jobless benefits fell less than expected last week while the four-week moving average of claims rose to its highest level since April, suggesting some loss of momentum in the labor market.
Initial claims for state unemployment benefits dropped 4,000 to a seasonally adjusted 231,000 for the week ended December 1, the Labor Department said on Thursday. Data for the prior week was revised to show 1,000 more applications received than previously reported. Economists had forecast claims falling to 225,000 in the latest week.
The US services sector expanded in the month of November, according to data released Thursday by the Institute for Supply Management.
The ISM non-manufacturing index rose to 60.7 last month, beating the forecast of 59.7 and slightly up from 60.3 in October. A reading above 50 indicates the non-manufacturing sector economy is generally expanding.
However, new orders for US-made goods recorded their biggest drop in more than a year in October and business spending on equipment appeared to be softening, suggesting a slowdown in activity in the manufacturing sector.
US factory goods orders fell 2.1% amid a decline in demand for a range of goods, the Commerce Department said on Thursday. That was the largest decrease in orders since July 2017. Data for September was revised lower to show factory orders rising only 0.2% instead of the previously reported 0.7% increase.
The Commerce Department also said October orders for non-defense capital goods excluding aircraft, which are seen as a measure of business spending plans on equipment, were unchanged, as reported last month.
The Energy Information Administration (EIA) reported on Thursday that US crude inventories fell by 7.32 million barrels for the week ended November 30, the first drawdown since September.
Gasoline stockpiles rose by 1.7 million barrels last week, while distillate stockpiles climbed by 3.81 million barrels, according to the EIA.
OPEC agreed in principle to cut production during a meeting at its headquarters in Vienna, Austria on Thursday, two sources told Reuters. However, the cartel delayed a decision on specific quotas until it consults Russia on Friday.
Economic data slated for release today include China’s November foreign exchange reserves, the eurozone’s third-quarter gross domestic product (GDP) growth and US November nonfarm payrolls report, the University of Michigan’s December consumer confidence index and October wholesale inventories.