Macro Roundup (Jun 3)

SHANGHAI, Jun 3 (SMM) – This is a roundup of global macroeconomic news last weekend and what is expected today.

Last weekend

The US dollar fell sharply on Friday after US President Donald Trump threatened new tariffs on Mexico. This latest salvo also weighed on US government debt yields and oil prices.

Most LME base metals traded lower on Friday, with the biggest loss of 1.3% in zinc. Nickel dropped 0.9%, copper fell 0.6% and tin declined 0.2% while lead gained 0.4% and aluminium advanced 0.7%.

SHFE base metals traded mixed on Friday night. Nickel declined 0.9%, zinc slipped close to 0.7% and copper shed 0.4%, while tin nudged up 0.01% and lead climbed 0.1%. Aluminium stayed flat.

Trump vowed on Thursday to ratchet up tariffs unless Mexico stopped people from crossing into the US illegally. The plan would impose a 5% tariff on Mexican imports starting on June 10 and increase monthly, up to 25% on October 1.

A key measure of Chinese manufacturing on Friday dampened market sentiment. China’s official purchasing managers’ index (PMI) for May came in at 49.4, missing the expectation of 49.9 and down from 50.1 in April. A reading above 50 indicates expansion while one below 50 signals contraction.

US consumer prices increased in April, which could support the Federal Reserve’s statement that recent low inflation readings were transitory and allow the central bank to keep interest rates unchanged for a while.

The Commerce Department said on Friday its personal consumption expenditures (PCE) price index increased 0.3% last month after rising 0.2% in March. That lifted the annual increase in the PCE price index to 1.5% from 1.4% in March.

Excluding the volatile food and energy components, the PCE price index gained 0.2% last month after edging up 0.1% in March. In the 12 months through April, the so-called core PCE price index increased 1.6% after rising 1.5% in March.

The government also reported on Friday that consumer spending, which accounts for more than two-thirds of US economic activity, rose 0.3% as consumers spent less on services, including household electricity and gas.

The University of Michigan said on Friday that its US consumer sentiment index dipped to 100 in May from the previous reading of 102.4. Recent readings have been close to its highest level since the start of 2004.

US Chicago PMI rose to 54.2 in May, up from 52.6 in April and beating the forecast of 54.

Day ahead

Today's key economic data include May factory activity out of China, Germany, the Eurozone and the US.