Macro Roundup (Jun 24)

Published: Jun 24, 2019 09:04

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A roundup of global macroeconomic news last weekend and what is expected today

SHANGHAI, Jun 24 (SMM) – This is a roundup of global macroeconomic news last weekend and what is expected today.

Last weekend

The US dollar fell against its major rivals last Friday after the US Federal Reserve joined other countries with plans to cut interest rates to support flagging economic growth.

The bank’s dovish tone, combined with news that St Louis Fed President James Bullard wanted a rate cut now rather than waiting like other officials did, drove some investors to bet that the bank could cut by as much as 50 basis points in July.

Base metals ended mostly lower as LME nickel lost almost 1.7%, zinc fell 1.3%, tin dipped 0.9%, aluminum dropped 0.8%, copper went down 0.2%, while lead jumped 0.2%. SHFE zinc decreased 1.1%, nickel slid 0.9%, aluminium fell 0.5%, tin and lead lost 0.3%, and copper declined 0.1%.

German manufacturing activity improved in June, showed the latest manufacturing activity report from HIS Markit research last Friday.

The German manufacturing purchasing managers index (PMI) rose to a four-month high of 45.4 in June, compared with the expected 44.5 and the 44.3 in May. Meanwhile, the services PMI hit a two-month high of 55.6 as against 55.4 in May.

"The June PMI confirms that German growth has stabilised at a moderate pace in the second quarter. The composite output index trended at 52.5 over the second quarter, just above the prints for the previous two quarters," commented Trevor Balchin, economics director at IHS Markit.

Economic growth in the eurozone has remained subdued, reaching a seven-month high despite the declining output from manufacturers, analysts at IHS Markit said on Friday.

The flash eurozone composite PMI rose to 52.1 in June, rising for the second consecutive month up from 51.8 in May and the highest since November 2018.

IHS Markit said the US flash manufacturing PMI dropped to 50.1 in June from 50.5 in May, the worst reading since September 2009. The flash services PMI in June also fell to 50.7 from 50.9, the worst reading since March 2016.

"Business activity edged closer to stagnation in June, expanding at the slowest rate since February 2016 and rounding off a second quarter in which the survey data point to the pace of economic expansion slipping to 1.4%," said Chris Williamson, chief business economist at IHS Markit.

US home sales jumped 2.5% in May, as lower mortgage rates appeared to help buyers overcome affordability challenges.

The National Association of Realtors said Friday that existing homes sold at a seasonally adjusted annual rate of 5.34 million units last month, up from 5.21 million units in April.

The number of active drilling rigs in the US decreased by two to 967 this week, and fell 85 rigsn from a year ago, according to the weekly data released by oilfield services provider Baker Hughes on Friday.

Day ahead

Economic data slated for release today include Germany’s ifo business climate index for June.

Macroeconomics

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