SHANGHAI, Feb 17 (SMM) – This is a roundup of global macroeconomic news last weekend and what is expected in the day ahead.
Concerns about the extent of the coronavirus (COVID-19) in China supported the US dollar and the safe-haven yen, after officials in Hubei, the epicentre of the virus outbreak, announced a sharp increase in new infections and deaths.
The US dollar index, which measures the currency against a basket of rivals, rose to its strongest since October. It has risen 0.4% last week, on top of gains of 1.3% last week.
LME base metals fell across the board last Friday night, with aluminium leading the losses and losing 1.9%. Nickle slipped 1.6%, zinc fell 1.1%, copper dropped 0.6%, lead eased 0.4%, and tin shed 0.2%.
Oil prices were on track for their best week since December on the prospects for deeper OPEC+ output cuts. The Organization of Petroleum Exporting Countries (OPEC) and allies including Russia, the so-called ‘OPEC Plus’ group has recommended reductions of up to 600,000 barrels per day.
On the data front, the gross domestic product (GDP) in Germany stagnated in the fourth quarter of 2019 compared to the previous quarter, the Federal Statistical Office (Destatis) announced on Friday.
According to Destatis, the price-adjusted GDP growth for the entire year 2019 was 0.6%, which was significantly less than in the previous two years when Germany's GDP was still growing between 1.5% and 2.5%.
The final consumption expenditure of both households and government "slowed down markedly" in the fourth quarter, Destatis noted. Investments, on the other hand, showed a mixed picture. While investments in machinery and equipment were "considerably" less than Q3, construction investments in Germany continued to rise.
US import price index was flat in January, as the falling cost of gas offset increases in non-fuel goods. Excluding fuel, prices of imported goods rose 0.2%, the government said Friday. On a yearly basis, the increase in import prices slowed to 0.3% from 0.5%. If fuel is omitted, import prices have fallen almost 1% over the past year.
US industrial production fell 0.3% in January as unseasonably warm weather held down the output of utilities and Boeing cut production of civilian aircraft, the Federal Reserve said on Friday.
The Fed said manufacturing production fell 0.1% in January, matching forecasts, but December's manufacturing output was revised lower to a 0.1% gain from a previously reported 0.2% gain.
Overall industrial output for December was revised downward to a 0.4% reduction from a previously reported 0.3% drop.
The University of Michigan consumer sentiment index registered an unexpected increase in February. Preliminary data showed the consumer sentiment index rose to 100.9 in February from the final January reading of 99.8. The uptick surprised economists, who had expected the index to edge down to 99.5.
The unexpected increase by the headline index came as the index of consumer expectations climbed to 92.6 in February from 90.5 in January.
"Net gains in household income and wealth were reported more frequently in early February than at any prior time since 1960," said Surveys of Consumers chief economist Richard Curtin.
However, Curtin added, "These gains in consumers' economic assessments have also been accompanied by a faint stirring of two powerful sources of uncertainty."
Baker Hughes reported that the number of oil and gas rigs in the US held fast yet again this week at 790, with the total oil and gas rig falling 261 over the last 52 weeks.
The number of oil rigs increased for the week, by 2 rigs, according to Baker Hughes data, bringing the total to 678, a 179-rig loss year over year.
The total number of active gas rigs in the United States fell by 1 according to the report, to 110. This compares to 194 a year ago.
China will release data on its social financing and M2 money supply for January.