Macro Roundup (Apr 22)

SHANGHAI, Apr 22 (SMM) – This is a roundup of global macroeconomic news last night and what is expected in the day ahead. 

The US dollar extended its increase on Tuesday as investors continued to search for safe haven following a plunge in oil prices a day earlier.

The dollar index, which tracks the greenback against a basket of other currencies, added 0.24% and finished at 100.19. 

Oil-linked currencies such as the Norwegian crown and the Canadian dollar were Tuesday’s worst-performing currencies. 

US crude oil futures fell into negative territory for the first time on Monday and the rout in crude prices continued overnight, pressured by a supply glut and decreased demand caused by the coronavirus pandemic.

West Texas Intermediate crude for June delivery lost 43.4% on Tuesday to settle at $11.57/barrel on the New York Mercantile Exchange, after touching a low at $6.5.

LME base metals fell across the board overnight as sharp losses in oil prices dampened market sentiment. Nickel led the declines with a drop of 2.86%. Tin shed 2.56%, copper fell 2.85%, aluminium lost 1%, zinc slipped 1.85%, and lead went down 1.25%.

Gold futures on Tuesday closed below $1,700/oz, their lowest level in nearly two weeks, as a strengthened US dollar weighed on the commodity priced in the currency after modest gains in the previous session.

On the data front, the German ZEW headline numbers for April showed that the economic sentiment index came in at 28.2, compared with the expected -42.3 and the previous -49.5.

“The financial market experts are beginning to see a light at the end of the very long tunnel. The results of the special questions on the coronavirus crisis included in the survey show that the experts do not expect to see positive economic growth until the third quarter of 2020. Economic output is not expected to return to pre-corona levels before 2022,” the ZEW president professor Achim Wambach noted.

Meanwhile, the eurozone ZEW economic sentiment stood at 25.2 for April, compared with the previous -49.5.

US home sales fell by the most in nearly 4-1/2 years in March as measures to control the spread of the COVID-19 brought buyer traffic to a virtual standstill. Economists expect further deterioration in housing market activity through the second quarter.

Existing home sales tumbled 8.5% to a seasonally adjusted annual rate of 5.27 million units in March. The decline was the largest since November 2015. The data reflected contracts signed in February or even January, before measures to curb the spread of the virus paralysed the economy.

Key economic data slated for release today include the eurozone consumer confidence index for April, the US Federal Housing Finance Agency (FHFA) house price for February, and the weekly crude oil change surveyed by the Energy Information Administration (EIA) and the American Petroleum Institute (API).