SHANGHAI, Feb 2 (SMM) – This is a roundup of global macroeconomic news last night and what is expected next week. SMM offices will close next week for the Chinese New Year holiday.
LME base metals traded mixed on Friday. Nickel jumped 1.6%, zinc climbed 1.3%, lead gained 0.5% and tin nudged up 0.07% while copper lost 0.4% and aluminium dropped 1.7%.
The Shanghai Futures Exchange shut overnight for the CNY holiday.
With the biggest number of US jobs created in 11 months for January and a rebound in US manufacturing, the US dollar index held stable on Friday. Mild wage inflation, shown in the US nonfarm payrolls, kept the dollar's gains in check.
China’s Caixin manufacturing purchasing managers' Index (PMI) came in at 48.3 in January, compared to 49.7 in December. Analysts had expected the PMI to be 49.6 last month.
It was the second consecutive month of contraction and the lowest reading since February 2016. A reading above 50 indicates expansion, while a reading below that level signals contraction.
Chinese authorities have introduced measures to support the economy in the past year, with a particular focus on helping to boost smaller firms. But Friday's release indicated that the policies have not worked, said Zhengsheng Zhong, director of macroeconomic analysis at CEBM Group, a subsidiary of Caixin.
"On the whole, countercyclical economic policy hasn't had a significant effect," Zhong said. "China is likely to launch more fiscal and monetary measures and speed up their implementation. Yet, the stance of stabilising leverage and strict regulation hasn't changed, which means the weakening trend of China's economy will continue."
Germany’s manufacturing sector contracted for the first time in more than four years in January, as a downward spiral in new orders deepened on weaker demand from major trade partners.
Markit’s PMI for German manufacturing, which accounts for about a fifth of the economy, fell to 49.7 in January, from 51.5 in December and weaker than a flash reading of 49.9.
Euro area headline inflation dropped for a third straight month in January. The consumer price index rose 1.4% year on year in January after a 1.6% increase in December, preliminary data from Eurostat showed on Friday. The latest inflation figure was in line with economists' expectations.
Core inflation, which excludes prices of energy food, alcohol and tobacco, accelerated to 1.1% in January from 1% in December. Economists had expected the rate to remain steady.
The latest survey data from IHS Markit showed that the eurozone manufacturing sector moved closer to stagnation in January amid a modest gain in output and a sharp fall in new orders.
The final eurozone manufacturing PMI dropped to 50.5, the lowest since November 2014 and in line with the flash estimate, from 51.4 in December.
US job growth in January shattered expectations, with nonfarm payrolls surging by 304,000 despite a partial government shutdown that was the longest in history, the Labor Department reported Friday.
The unemployment rate ticked higher to 4%, a level where it had last been in June, a likely effect of the shutdown, according to the department.
Adjusted for seasonal influences, the IHS Markit flash US manufacturing PMI rose to 54.9 in January, from 53.8 in December, the IHS Markit reported on Thursday.
The Institute for Supply Management (ISM) said on Thursday that its manufacturing PMI for the US registered 56.6 in January, up from the December reading of 54.3.
The University of Michigan’s final January US consumer sentiment index fell to a two-year low of 91.2, though that was higher than the forecast of 90.7.
Surveys of Consumers chief economist Richard Curtin noted the index remained at its lowest level since President Donald Trump was elected, as the end of the shutdown provided only a modest boost.
"The typical impact of such 'crisis' events is short lived, with consumers quickly regaining lost confidence," Curtin said. "That is unlikely to occur this time as the deadline for resolution has only been extended until mid February."
He added, "If the standoff continues into late February, it could foster sustained declines in economic optimism among consumers."
The total number of active oil and gas drilling rigs in the US fell by 14 in the week ended February 1, according to a report from Baker Hughes on Thursday, with the number of active oil rigs falling by 15 to reach 847 and the number of gas rigs increasing by one to reach 198.
China will release January foreign exchange reserves, total social financing and M2 money supply.
The US will release December personal spending, personal consumption expenditures (PCE) price index, trade account, retail sales, wholesale inventories, durable goods orders and factory orders as well as the fourth-quarter gross domestic product (GDP) growth and consumer expenditures, January ISM services PMI, weekly crude inventory data, jobless claims and rig count data.
The eurozone will release February Sentix investor confidence index and December retail sales. Germany will release December industrial output and trade account.