Metals News
Macro Roundup (Feb 18)
data analysis
Feb 18,2019

SHANGHAI, Feb 18 (SMM) – This is a roundup of global macroeconomic news last weekend and what is expected today.

Last weekend

LME base metals traded higher across the board on Friday. Zinc advanced 2.9%, lead rose 2%, nickel climbed 1.8%, copper rose 1.4%, tin crept 0.9% and aluminium gained 0.3%

SHFE base metals performed similarly on Friday night. Zinc saw the biggest gain of 2.1% and nickel gained 1.4% with lead up 1.3%. Aluminium advanced 0.8%, tin and copper rose 0.6%.

The US dollar weakened on Friday after San Francisco Federal Reserve Bank President Mary Daly indicated the central bank may hold off on raising interest rates in 2019, which improved risk appetite in the currency market.

The Fed probably will not need to raise rates this year, given a slowdown in economic growth and muted inflation, Daly told the Wall Street Journal in an interview published on Friday.

The growth of consumer and producer prices in China for January both fell short of expectations.

The consumer price index (CPI), a gauge of prices for goods and services, expanded 0.5% on the month, after it lost 0.3% in December.

On a yearly basis, economists expected the CPI to increase by the same margin as December, of 1.9%. It rose 1.7% from January 2018, the National Bureau of Statistics said on Friday February 15.

The producer price index (PPI), which measures price increases before they are passed onto consumers, rose 0.1% year on year in January, the lowest gain since September 2016, compared to the expectations of a growth of 0.3%.

The PPI declined 0.6% on the month, after it lost 1% in December.

China’s banks made the most new loans on record in January, totalling 3.23 trillion yuan, as policymakers try to bolster investment and prevent a sharper slowdown.

Net new yuan lending last month was far more than expected, and eclipsed the last high of 2.9 trillion yuan in January 2018, data from the People's Bank of China showed Friday.

The M2, a broad measure of money supply that covers cash in circulation and all deposits, rose 8.4% year on year to 186.59 trillion yuan at the end of January, according to the central bank.

Meanwhile, China's total social financing, a broad measure of credit and liquidity in the economy, hit a record 4.64 trillion yuan in January.

The eurozone recorded a 17 billion euro surplus in trade in goods with the rest of the world in December 2018, compared with 24.5 billion in the same period a year ago, data from Eurostat showed Friday.

After seasonal adjustment, the trade surplus came in at 15.6 billion euro, narrower than an upwardly revised 15.8 billion euro in November.

US factory production unexpectedly contracted in January, shrinking the most in eight months on weakness in the automotive sector and indicating a weak start to the year as headwinds including a trade war with China weighed on factories.

Manufacturing output across the nation fell 0.9% after a downwardly revised 0.8% increase in the prior month, Federal Reserve data showed Friday. The results missed the forecast calling for an unchanged reading. Total industrial production, which also includes mines and utilities, contracted 0.6% after a downwardly revised 0.1% rise in December.

US import prices fell for a third straight month in January, down 0.5% month on month, data showed on Friday. Economists had expected a decrease of 0.2% in average.

On a year-on-year basis, import prices declined 1.7%, the largest in nearly 2-1/2 years.

Consumer sentiment gained more than expected in early February as US spending confidence recovered after the end of the longest government shutdown in history.

The University of Michigan consumer sentiment index rose to 95.5 this month from 91.2 in January, preliminary data showed. Economists expected the index to rise to 93.5.

The total US rig count added 2 to 1,051 in the week ended February 15 after gaining 4 a week ago, according to Baker Hughes' latest weekly survey.

The count of active US oil drilling rigs rose 3 to 857 following last week's gain of 7, while gas rigs lost 1 to 194.

Day ahead

Following last week’s negotiations in Beijing, trade talks between the US and China are set to continue in Washington this week.

Some US markets will shut or close earlier today in observance of President's Day.

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