Macro Roundup (Feb 22)

Published: Feb 22, 2019 08:52 (GMT+8)
Macro Roundup

SHANGHAI, Feb 22 (SMM) – This is a roundup of global macroeconomic news last night and what is expected today.

Last night

LME base metals traded mixed on Thursday. Zinc and copper fell 0.8%, nickel lost 0.5%, while aluminium rose 1.6% lead climbed 1.2% and tin inched up 0.2%.

SHFE base metals, except for copper and tin, traded higher overnight. Aluminium crept 1%, lead advanced 0.9%, zinc expanded 0.3% and nickel edged up 0.1%.

The US dollar index on Thursday recovered from earlier losses spurred by soft US economic data, as investors consolidated positions and looked for fresh trading incentives amid US-China trade talks and Brexit negotiations.

The greenback earlier fell, hurt by weaker-than-expected US economic data that affirmed expectations the Federal Reserve will hold interest rates steady this year.

US headline durable goods orders rose 1.2% in December, below expectation of 1.7%, the Commerce Department said on Thursday. November’s growth of durable goods orders was upwardly revised from 0.7% to 1%.

US home sales fell in January to their lowest level in more than three years and house prices rose only modestly, suggesting a further loss of momentum in the housing market.

The National Association of Realtors said on Thursday existing home sales dropped 1.2% to a seasonally adjusted annual rate of 4.94 million units last month.

That was the lowest level since November 2015 and well below analysts' expectations of a rate of 5 million units. December's sales pace was revised slightly higher.

Adjusted for seasonal influences, the IHS Markit Flash US manufacturing purchasing managers’ index (PMI) dipped to 53.7 in February from 54.9 in January. While February’s figure still stands above the 50-point mark which indicates improve conditions, it is the slowest improvement in business conditions since September 2017.

The weakness comes on the same day the Philadelphia Fed reported its gauge of manufacturing fell into negative territory for the first time since May 2016.

The number of Americans filing applications for unemployment benefits fell last week, but the four-week moving average rose to a more than one-year high, suggesting the labor market was slowing down.

Initial claims for state unemployment benefits dropped 23,000 to a seasonally adjusted 216,000 for the week ended February 16, the Labor Department said on Thursday.

The Energy Information Administration (EIA) Thursday reported an increase in US crude oil inventories in the amount of 3.67 million barrels for the week to February 15, versus an increase of 3.63 million barrels in the previous week.

US gasoline inventories fell by 1.45 million barrels last week, versus a 408,000-barrel rise a week earlier, while stocks of distillate fuels fell 1.52 million barrels, compared with a 1.19-million-barrel inventory rise a week earlier, according to the EIA report.

The IHS Markit flash manufacturing PMI for the eurozone dropped to a 68-month low of 49.2 in February, from 50.5 in the previous month.

The index for Germany’s manufacturing slipped further into contraction territory and arrived at 47.6 in February, versus the expectations of 49.8. The index came in at 49.7 for January.

The German final reading for the consumer price index (CPI) in January came at -0.8%. This was in line with the expectations and unchanged from the previous month, according to the Federal Statistical Office (Destatis).

On a yearly basis, German consumer prices grew 1.4% in January, meeting the forecasts and unchanged from the previous month.

Day ahead

Economic data slated for release today include Germany’s fourth-quarter gross domestic product (GDP) growth and February Ifo business climate index, the eurozone’s January CPI and US weekly oil rig count report from Baker Hughes.

Officials from China and the US will continue their trade negotiations in Washington today.

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