SHANGHAI, May 6 (SMM) – This is a roundup of global macroeconomic news last night and what is expected in the day ahead.
The US dollar increased for the third session, lifted by the prospect of reopenings in some countries and US states and the better-than-expected US services data.
LME base metals rose across the board on Tuesday. Nickel was the best performer with a rise of 1.95%. Copper advanced 0.92%, aluminium gained 0.37%, zinc added 1.03%, tin climbed 0.4% and lead increased 0.58%.
US stocks also went higher Tuesday, as did crude futures, which gained 20%, with Brent up around 12% as production fell and countries around the world, including Italy, Finland and several US states, eased lockdown restrictions.
The US Institute for Supply Management’s (ISM) non-manufacturing index fell to 41.8 in April, from 52.5 in March, but the April level was higher than the consensus forecast of 36.8.
The April’s reading plunged into contraction territory for the first time in a decade as the pandemic forced shutdowns and layoffs nationwide.
"Social distancing measures are being gradually lifted, but it will take time to undo the economic damage," said Oren Klachkin, lead U.S. economist at Oxford Economics.
The March trade balance report showed the US deficit widened from 39.9 billion to 44.4 billion.
Overall imports fell 6.2%, while exports saw a record decline of 9.6%, causing the trade gap to widen. Both sides were driven lower by record declines in services, which saw a $10.8 billion decline in both imports and exports.
The American Petroleum Institute (API) reported late Tuesday that US crude supplies rose by 8.4 million barrels for the week ended May 1. The API data also reportedly showed gasoline stockpiles down by 2.2 million barrels, while distillate inventories climbed by 6.1 million barrels.
The UK services sector activity contracted less-than-expected in April, the final report from IHS Markit showed Tuesday.
The seasonally adjusted HIS/Markit UK services purchasing managers’ index (PMI) was revised higher to 13.4 in April, compared with an expected 12.2 and April’s preliminary reading of 12.3.
“April's PMI data highlights that the downturn in the UK economy during the second quarter of 2020 will be far deeper and more widespread than anything seen in living memory,” said Tim Moore, Economic Director at IHS Markit.
"Historical comparisons of the PMI with GDP indicate that the April survey reading is consistent with the economy falling at a quarterly rate of approximately 7%, but we expect the actual decline in GDP could be even greater, in part because the PMI excludes the vast majority of the self-employed and the retail sector.”
Key economic data slated for release today include the weekly crude oil change surveyed by the Energy Information Administration (EIA), the US non-farm payrolls and the eurozone retail sales for March.