SHANGHAI, Jun 10 (SMM) – This is a roundup of global macroeconomic news last weekend and what is expected today.
The US dollar dropped on Friday as disappointing US nonfarm payroll figures boosted speculation of an interest rate cut from the Federal Reserve.
LME base metals, except for tin, closed lower on Friday, with the biggest loss of 2.4% in lead. Zinc declined 1.1%, copper and aluminium fell 0.8%, and nickel lost 0.5%.
The SHFE closed from Thursday night for the Dragon Boat Festival and will reopen today.
The US Labor Department reported that job creation decelerated strongly in May, with nonfarm payrolls up by just 75,000. The decline was the second time in four months that payrolls increased by less than 100,000 even as the unemployment rate remained at a 50-year low.
Economists polled by Dow Jones expected an increase of 180,000 jobs. Wage growth also slowed.
Also on Friday, the US Commerce Department said that wholesale inventories rebounded 0.8% in April, instead of increasing 0.7% as previously reported. Wholesale inventories were unchanged in March. They rose 7.6% on a year-on-year basis in April.
The inventory overhang is concentrated in the automobile industry, which is experiencing a slowdown in sales. In April, wholesale auto inventories increased 3.8%, the largest gain since August 2018, after falling 0.3% in the prior month.
Sales at wholesalers dropped 0.4% in April after gaining 1.8% in March. At April’s sales pace it would take wholesalers 1.34 months to clear shelves, up from 1.33 months in March.
Data from Baker Hughes on Friday showed the largest weekly decline in active US oil drilling rigs in six weeks. In the week ended June 7, the number of active US oil rigs fell 11 to 789, implying a potential slowdown in drilling activity.
In Germany, industrial output and exports fell sharply in April, highlighting the continued vulnerability of Europe's largest economy to trade frictions and Brexit uncertainty. This echoed the concerns about the eurozone growth the European Central Band, who on Thursday ruled out raising rates in the next year and even opened the door to buying more bonds.
Industrial output dropped 1.9% on the month, the sharpest decline since August 2015, after a steep fall in the production of investment and intermediate goods. Economists had forecast a 0.5% fall.
Exports fell 3.7%, also the biggest drop since August 2015.
On the trade front, US President Donald Trump announced on Friday that the US and Mexico reached a deal to avoid the implementation of tariffs, originally set to kick in on Monday, after Mexico agreed to strengthen immigration enforcement.
US Treasury Secretary Steven Mnuchin, who has been among the lead negotiators involved in trade talks with China, told CNBC on Sunday that Trump will decide on whether to implement more tariffs on China after the American leader meets with Chinese President Xi Jinping later in June.
British Prime Minister Theresa May has officially resigned as leader of the UK’s Conservative Party, but she will maintain her position as Prime Minister until a political heir is found.
Economic data slated for release today include China’s financial and trade data for May and the US job openings in April.