Macro Roundup (Mar 18)

SHANGHAI, Mar 18 (SMM) – This is a roundup of global macroeconomic news last night and what is expected in the day ahead.

Last night

The US dollar surged against a broad range of currencies on Tuesday as companies and investors sought out the most liquid currency as concerns about economic shutdowns from the coronavirus continued to dent risk appetite.

US stocks rebounded from their worst day in more than three decades as Wall Street cheered White House plans that could inject $1 trillion into the US economy to cushion the blow of the coronavirus.

Oil prices extended their losses to multi-year lows, while gold prices rebounded.

London base metals tumbled across the board, with tin diving 7.9% on the day to lead the losses. Lead plunged 6.6%, zinc dropped 3.4%, copper sank 2.7%, aluminium fell 2.3%, and nickel lost 0.8%.

On the data front, US retail sales unexpectedly fell in February, with households cutting back on purchases of a range of products, and the coronavirus outbreak is expected to depress sales in the months ahead. The US Commerce Department reported Tuesday that US retail sales fell 0.5% in February following January's revised rise of 0.6%.

The Federal Reserve said Tuesday that US industrial production — including factories, utiliities and mines — rose 0.6% in February, reversing drops in December and January. Industrial production has been flat over the past year.

German ZEW economic sentiment dropped sharply from 8.7 to -49.5 in March, way worse than expectation of -23.4. The -58.2 points decline was the largest since the survey started back in December 1991. That’s also the lowest since 2008 financial crisis. Current situation index dropped to -43.1, down from -15.7, missed expectation of -25.0. For Eurozone, ZEW economic sentiment dropped -59.9 points to -49.5. Current situation index dropped -38.2 to -48.5.

The American Petroleum Institute (API) reported late Tuesday that US crude supplies edged lower by 421,000 barrels for the week ended March 13, compared to an expected build of 2.933-million-barrels. The API data also showed gasoline stockpiles fell by 7.8 million barrels last week, while distillate inventories declined by 3.6 million barrels.

It was reported on Tuesday that the London Metal Exchange plans to temporarily suspend trading on its iconic open-outcry dealing floor for the first time since World War II as the UK tries to limit the spread of the coronavirus. The switch to electronic price determination is currently planned for March 23.

The Shanghai Futures Exchange kept its night trading session suspended to contain the spread of the virus.

Day ahead

Economic data slated for release today include US housing starts and building permits data for February and weekly crude inventory data from the Energy Information Administration (EIA).

The eurozone’s February consumer inflation data and January trade data will also be released today.