Macro Roundup (Jan 9)

SHANGHAI, Jan 9 (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, rose on Wednesday, as investors grew more optimistic that Iran’s attack on US forces in Iraq was unlikely to escalate into a full-blown regional conflict.

Comments from both sides played down the prospect of further escalation. US President Donald Trump said Iran “appears to be standing down” in the Middle East and that Washington would impose sanctions on Tehran instead of another military strike as feared by some investors. Trump also confirmed in his White House speech that no Americans were harmed during the bombing. Iranian Foreign Minister Mohammad Javad Zarif tweeted that the attack was “proportionate” and that “we do not seek escalation or war.”

With investor risk appetite recovering somewhat, gold prices eased off a seven-year peak on Wednesday. Oil prices also pulled back, while most base metals strengthened.

LME base metals, except for aluminium, closed higher on Wednesday. Zinc added 1.7% to lead the gains, nickel advanced 1.2%, tin climbed 1%, copper rose 0.3% and lead edged up 0.1%.

The SHFE complex performed similarly. Nickel crept up 1.4%, zinc increased 0.5%, lead gained 0.4%, copper and tin advanced 0.3%.

Upbeat US private payrolls number for December also helped improve market sentiment. The ADP National Employment Report on Wednesday showed private payrolls jumped by 202,000 jobs in December, the largest gain since April, after an upwardly revised 124,000 gain in November.

Oil prices extended their decline after the government reported on Wednesday showed that US inventories of crude oil rose unexpectedly last week, with stockpiles climbing 1.2 million barrels to 431.1 million barrels. That puts inventories around its five-year average for this time of year, the Energy Information Administration (EIA) said.

In Europe, German factory orders fell unexpectedly in November on the back of weak foreign demand, according to figures published on Wednesday.

However, data published Wednesday by economic institutes Ifo suggested that the eurozone economy is gaining momentum. The Ifo Institute said that economic growth will rise to 0.3% in the fourth quarter of 2019 from 0.2% in the previous quarter.

Day ahead

Chinese December inflation data, German November industrial output and trade balance, the eurozone’s November unemployment rate and US weekly jobless claims are slated for release today.