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Macro Roundup (May 10)

iconMay 10, 2019 08:42
Source:SMM
A roundup of global macroeconomic news last night and what is expected today

SHANGHAI, May 10 (SMM) – This is a roundup of global macroeconomic news last night and what is expected today.

Last night

The US dollar dropped to the 6-week low against the yen, as risk appetite lowered on most markets amid the US-China trade conflict.

Two days of negotiations begin in Washington on Thursday, and traders are waiting to see whether Chinese and the US officials can salvage a deal to prevent more US tariff increases.

LME base metals declined for the most part while SHFE metals mostly increased. LME aluminum advanced 0.42%, copper rose 0.13%, while lead lost 1.89%, nickel fell 1.01%, tin slid 0.62%, and zinc dropped 0.34%. SHFE copper climbed 0.52%, aluminium jumped 0.21%, zinc grew 0.14%, nickel expanded 0.09%, while tin went down 0.74%, and lead dipped 0.34%. 

China's April consumer inflation was in line with expectations, but a spike in pork prices contributed to higher food prices, the National Bureau of Statistics data showed on Thursday.

Overall consumer price index (CPI) in April rose 2.5% from a year ago, meeting analysts' expectations and slightly higher the year-on-year increase of 2.3% in March.

However, food consumer price inflation rose 6.1% from a year ago in April compared to a 4.1% rise a month earlier. Pork prices, in particular, soared 14.4% on-year and 1.6% on-month. China's hog herd has been hit by African swine fever in recent months. April non-food inflation was 1.7%. 

Producer price inflation (PPI), a gauge of industrial profitability, rose 0.9% from a year ago in April, the fastest pace since December 2018. That was up from a 0.4% year-on-year increase in March, and higher than the expected 0.6%.

Thursday's data also showed that China’s broad M2 money supply in April grew 8.5% from a year earlier, in line with market estimates but dipping slightly from March.

Outstanding yuan loans grew 13.5% from a year earlier, slightly lower than expectations and March's 13.7%.

Growth of outstanding total social financing (TSF), a broad measure of credit and liquidity in the economy, slowed to 10.4% from a year earlier from 10.7% in March. TSF growth is a rough gauge of credit conditions.

Total TSF in April fell much more than expected, to 1.36 trillion yuan from 2.86 trillion yuan in March.

The overall US trade deficit with the world increased 1.5% in March to $50 billion, as it continued to import more goods and services than it exported worldwide. At the same time, the US deficit with China narrowed further as US farmers exported more soybeans.

US producer prices rose moderately in April, but underlying inflation pressures at the factory gate appeared to be picking up.

The Labor Department said on Thursday its producer price index for final demand increased 0.2% last month after jumping 0.6% in March. On a yearly basis, the PPI increased 2.2%, matching March's rise.

The US Commerce Department said on Thursday wholesale inventories in March slipped 0.1%, instead of being unchanged as previously reported. March's drop in wholesale inventories was the first decline since October 2017.

Sales at wholesalers jumped 2.3% in March, the largest increase since May 2018, after gaining 0.3% in February. There were increases in sales of motor vehicles, furniture, professional equipment and electrical goods.

Day ahead

The US will release data on its CPI for April, and Germany will release its trade balance data for March. 

Macroeconomics

For queries, please contact Michael Jiang at michaeljiang@smm.cn

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