Macro Roundup (Dec 17)

Data Analysis 08:50:28AM Dec 17, 2018 Source:SMM

SHANGHAI, Dec 17 (SMM) – This is a roundup of global macroeconomic news last weekend and what is expected today.

Last weekend

Most LME base metals traded lower on Friday with the biggest losses in zinc, down some 1.6% on the day. Tin fell 0.3%, aluminium and copper slid about 0.2% while lead gained close to 0.4% and nickel jumped close to 1.8%.

SHFE base metals, except for lead, ticked higher across the board on Friday night with nickel also being the best performer, up some 1.4%. Aluminium climbed 0.2%, copper gained some 0.1%, tin and zinc grew marginally.

The US dollar reached a 19-month high against a basket of currencies on Friday, as investors preferred the safety of the world's reserve currency in the wake of political and economic turmoil outside the US.

Upbeat US data on domestic retail sales and industrial output also buoyed the greenback, but gains were limited by bets that the Federal Reserve might reduce the number of interest rate increases after a widely-expected hike next week.

US retail sales increased 0.2% in November, as lower gas prices offset the impact of strong sales from the holiday season.

Excluding gas, however, the Commerce Department said on Friday that last month's retail sales rose a healthy 0.5%, a positive sign for economic growth.

US industrial production rose 0.6% last month. But data for October was revised downwards to show that output fell 0.2% instead of advancing 0.1% as previously reported.

Industrial output rose in November as a jump in mining and utilities production was offset by drops in other sectors including business equipment and construction.

In China, retail sales grew in November at their slowest pace since 2003 and industrial output rose the least in nearly three years.

Retail sales rose 8.1% on a yearly basis in November, marking the weakest pace since 2003, lower than the 8.8% the analysts expected and down from 8.6% in October, according to data from the National Bureau of Statistics.

Industrial output in November grew 5.4% from a year ago, the slowest pace in almost three years as it matched growth in January to February 2016 and lower than the expected 5.9% increase.

Fixed asset investment rose 5.9% from January to November, marginally higher than the 5.8% the economists had forecast. FAI rose 5.7% from January to October.

The weaker November industrial output and retail sales growth numbers showed growing downward pressure on the economy, said Mao Shengyong, spokesman at the statistics bureau. But China remains on track to hit its 2018 economic growth target of around 6.5%, Mao added.

In the eurozone, manufacturing extended its downtrend in December, the latest manufacturing activity survey from IHS-Markit research showed.

The eurozone manufacturing purchasing managers’ index (PMI) dropped further to a 34-month low of 51.4 in December while the services PMI dropped to a 49-month low of 51.4.

"The eurozone economy saw a disappointing end to 2018, with growth slowing to the weakest for four years. While some of the slowdown reflected disruptions to business and travel arising from the Yellow Vest protests in France, the weaker picture also reflects growing evidence that the underlying rate of economic growth has slowed across the euro area as a whole," said Chris Williamson, chief business economist at IHS-Markit.

The flash reading of US manufacturing PMI fell to a 13-month low of 53.9 in December from 55.3 in November, IHS Markit reported on Friday, mainly on a decline from new orders and employment. The flash reading of US services PMI fell to an 11-month low of 53.4 in December from 54.7 in November, also after a decline in new business. Any reading above 50 indicates improving conditions.

"Importantly, although growth remains relatively robust, momentum is being lost and is likely to continue to fade as we move into 2019," said Williamson. He added that new orders fell to the lowest since April 2017 and that expectations regarding future business growth slipped to the lowest for 2½ years.

In the US, 1,071 rigs were working for the week ended December 14, down four from a week ago. Oil-directed rigs dropped 4 units from the previous week to 873 units working while gas-directed rigs remained unchanged at 198, according to Baker Hughes data.

Day ahead

Economic data slated for release today include the eurozone’s trade balance for October and consumer prices for November.

Key Words:  Macroeconomics  

Macro Roundup (Dec 17)

Data Analysis 08:50:28AM Dec 17, 2018 Source:SMM

SHANGHAI, Dec 17 (SMM) – This is a roundup of global macroeconomic news last weekend and what is expected today.

Last weekend

Most LME base metals traded lower on Friday with the biggest losses in zinc, down some 1.6% on the day. Tin fell 0.3%, aluminium and copper slid about 0.2% while lead gained close to 0.4% and nickel jumped close to 1.8%.

SHFE base metals, except for lead, ticked higher across the board on Friday night with nickel also being the best performer, up some 1.4%. Aluminium climbed 0.2%, copper gained some 0.1%, tin and zinc grew marginally.

The US dollar reached a 19-month high against a basket of currencies on Friday, as investors preferred the safety of the world's reserve currency in the wake of political and economic turmoil outside the US.

Upbeat US data on domestic retail sales and industrial output also buoyed the greenback, but gains were limited by bets that the Federal Reserve might reduce the number of interest rate increases after a widely-expected hike next week.

US retail sales increased 0.2% in November, as lower gas prices offset the impact of strong sales from the holiday season.

Excluding gas, however, the Commerce Department said on Friday that last month's retail sales rose a healthy 0.5%, a positive sign for economic growth.

US industrial production rose 0.6% last month. But data for October was revised downwards to show that output fell 0.2% instead of advancing 0.1% as previously reported.

Industrial output rose in November as a jump in mining and utilities production was offset by drops in other sectors including business equipment and construction.

In China, retail sales grew in November at their slowest pace since 2003 and industrial output rose the least in nearly three years.

Retail sales rose 8.1% on a yearly basis in November, marking the weakest pace since 2003, lower than the 8.8% the analysts expected and down from 8.6% in October, according to data from the National Bureau of Statistics.

Industrial output in November grew 5.4% from a year ago, the slowest pace in almost three years as it matched growth in January to February 2016 and lower than the expected 5.9% increase.

Fixed asset investment rose 5.9% from January to November, marginally higher than the 5.8% the economists had forecast. FAI rose 5.7% from January to October.

The weaker November industrial output and retail sales growth numbers showed growing downward pressure on the economy, said Mao Shengyong, spokesman at the statistics bureau. But China remains on track to hit its 2018 economic growth target of around 6.5%, Mao added.

In the eurozone, manufacturing extended its downtrend in December, the latest manufacturing activity survey from IHS-Markit research showed.

The eurozone manufacturing purchasing managers’ index (PMI) dropped further to a 34-month low of 51.4 in December while the services PMI dropped to a 49-month low of 51.4.

"The eurozone economy saw a disappointing end to 2018, with growth slowing to the weakest for four years. While some of the slowdown reflected disruptions to business and travel arising from the Yellow Vest protests in France, the weaker picture also reflects growing evidence that the underlying rate of economic growth has slowed across the euro area as a whole," said Chris Williamson, chief business economist at IHS-Markit.

The flash reading of US manufacturing PMI fell to a 13-month low of 53.9 in December from 55.3 in November, IHS Markit reported on Friday, mainly on a decline from new orders and employment. The flash reading of US services PMI fell to an 11-month low of 53.4 in December from 54.7 in November, also after a decline in new business. Any reading above 50 indicates improving conditions.

"Importantly, although growth remains relatively robust, momentum is being lost and is likely to continue to fade as we move into 2019," said Williamson. He added that new orders fell to the lowest since April 2017 and that expectations regarding future business growth slipped to the lowest for 2½ years.

In the US, 1,071 rigs were working for the week ended December 14, down four from a week ago. Oil-directed rigs dropped 4 units from the previous week to 873 units working while gas-directed rigs remained unchanged at 198, according to Baker Hughes data.

Day ahead

Economic data slated for release today include the eurozone’s trade balance for October and consumer prices for November.

Key Words:  Macroeconomics