Macro Roundup (May 9)

SHANGHAI, May 9 (SMM) – This is a roundup of global macroeconomic news last night and what is expected in the day ahead. 

The US dollar declined in late trading on Friday after official data showed a record 20.5 million jobs were lost in the world's largest economy in April.

But the greenback was on track to post its largest weekly gain compared with the euro in more than a month, although that was more related to the European single currency concerning the European Central Bank’s asset purchases.

SHFE base metals mostly held onto gains overnight after they ended mixed on the day. Copper advanced 0.35%, aluminium added 0.4%, zinc climbed 0.18%, nickel rose 0.32% while lead slipped 0.75% and tin lost 0.08%. Rebar increased by 0.2% and stainless steel went up 2.28%. The LME was closed on Friday for the bank holiday.

Oil futures closed higher Friday, with optimism around production cuts and rising demand for gasoline lifting to US benchmark prices by 25% this week.

“While rising crude and product stocks continue to pose a threat to market fundamentals, key trends on both the supply and demand side have shifted bullish in recent data,” said Robbie Fraser, senior commodity analyst at Schneider Electric.

West Texas Intermediate crude for June delivery on the New York Mercantile Exchange, rose 5.1% to settle at $24.74/barrel. Global benchmark July Brent crude added 5.1% to end at $30.97/barrel on ICE Futures Europe, for a 17.1% weekly climb.

Gold futures dipped on Friday, pressured by an increase in the US benchmark stock indexes despite data showing a loss of more than 20 million US jobs in April. 

June gold fell 0.7% to settle at $1,713.90/ounce. For the week, prices for the most-active contract were still up by 0.8%.

US total nonfarm payroll employment fell by 20.5 million in April, and the unemployment rate rose to 14.7%, due to the impact of the COVID-19 pandemic, the U.S. Bureau of Labor Statistics reported Friday.

Both numbers easily smashed post-World War II era records and help reflect the profound damage done through efforts used to combat the virus.

Employment fell sharply in all major industry sectors, with particularly heavy job losses in leisure and hospitality, said the report.

The bleak numbers paint a “pretty dismal picture, but April may be it for job losses going forward with the country starting to reopen,” said Chris Rupkey, chief financial economist at MUFG Union Bank. “If there is a silver-lining in today’s dismal jobs report, it is in the realization that the economy cannot possibly get any worse than it is right now.”

The Commerce Department said on Friday that wholesale inventories in the US decreased less than expected in the month of March. Wholesale inventories dropped 0.8% in March after falling by 0.7% in February. Economists had expected inventories to tumble by 1%.

Inventories of non-durable goods led the way lower, falling by 2.7%, although the nosedive was partly offset by a 0.5% rise in inventories of durable goods. 

German exports plunged 11.8% on the month in March amid the coronavirus pandemic, which was the steepest monthly decline since the data was first published in August 1990, Germany's statistics office Destatis said Friday.

Imports lost 5.1% on month, showing the largest month-on-month decrease since January 2009, when they fell 6.5%. 

Germany's trade surplus, the balance of exports and imports of goods, totalled 12.8 billion euros in the calendar and seasonally adjusted terms in March, according to Destatis.

Key economic data slated for release on Saturday include China’s social financing for April and the weekly change in the US active rig count.