Macro Roundup (Jan 8)

SHANGHAI, Jan 8 (SMM) – This is a roundup of global macroeconomic news last night and what is expected in the day ahead.

Last night

The US dollar index, which measures the greenback against a basket its rivals, rallied on Tuesday, as investors assessed the growing geopolitical risks stemming from US-Iran tensions along with better-than-expected data on the economy.

LME base metals, except for aluminium and lead, closed higher on Tuesday. Zinc added 1.4% to lead the gains, nickel advanced 0.7%, tin rose 0.5% and copper gained 0.4%.

The SHFE complex also traded mostly higher overnight. Zinc jumped 1.8% to be the biggest gainer, tin rose 0.7%, nickel increased 0.6% and lead gained 0.4%, while aluminium dipped 0.07% and copper shed 0.2%.

Tensions between the US and Iran, however, have escalated, as multiple reports this morning said that rockets were fired at an Iraqi airbase that houses American troops. Oil and gold prices soared, while US stocks plunged following Iran’s latest retaliation against the US for the killing of a top Iranian general last week.

On the data front, the US Institute for Supply Management’s non-manufacturing index at 55 in December, up from 53.9 in November and slightly higher than market expectations. US factory orders, however, fell 0.7% in November, though that was a little better than forecasts of a 0.8% drop.

Eurozone inflation picked up by 1.3% in December as expected, compared to 1% in November, but is expected to dip again at the start of 2020, according to Eurostat. Inflation remains well below the European Central Bank (ECB) target of close to, but below, 2%.

Separately, Eurostat said that retail trade, an indicator of household demand, was much stronger than expected in November, rebounding from two consecutive month-on-month falls with a 1% rise that produced a 2.2% year-on-year gain.

US crude stockpiles dropped by 5.9 million barrels for the week ended January 3, the the American Petroleum Institute (API) reported, compared with a plunge of about 11.5 million barrels reported for the week before.

China’s foreign-exchange reserves increased $12.3 billion from a month earlier to $3.108 trillion in December, reversing a $9.6 billion drop in November, according to data released by the People’s Bank of China.

Day ahead

Economic data slated for release today include the eurozone’s business climate index and consumer sentiment index for December, and the US December Automatic Data Processing (ADP) employment report and weekly crude inventory data from the Energy Information Administration (EIA).