Macro Roundup (May 19)

SHANGHAI, May 19 (SMM) – This is a roundup of global macroeconomic news last night and what is expected in the day ahead.

Oil prices jumped on Monday, supported by production cuts and the easing of stay-at-home restrictions, while US stocks scored its best day in six weeks on rising optimism about a coronavirus vaccine.

The jump in oil prices and gains in stocks, meanwhile, depressed the US dollar, with the index, which tracks the greenback against a basket of its peers, dropping below the 100 mark and suffering the biggest one-day loss in six weeks.

Oil prices extended their rally in the morning of Asian trading hours on Tuesday, while the US dollar index traded at 99.6.

LME base metals drifted mostly higher on Tuesday morning, extending gains from the broad rally in the previous session. On Monday, six nonferrous metals on the LME moved sharply higher across the board, with lead surging close to 3.8% to be the best performer. Nickel jumped 3.7%, copper advanced 3.1%, aluminium and zinc climbed 2.7%, and tin rose 1.8%.

On the SHFE, those nonferrous metals also continued their rebound in overnight trading, and nickel surged 2.5% to lead the way up. Zinc jumped 1.9%, tin rose 1.7%, copper gained 1.6%, lead climbed 1.5% and aluminium was up 1.4%.

On the economic data front, the Japanese economy contracted at an annualized rate of 3.4% between January and March, according to data released Monday by the country’s Cabinet Office. That was less than a median estimate of a 4.6% decline. Still, the shrinking of the economy marked the country’s second straight quarter of contraction, meeting the technical definition of a recession.

Japan’s industrial production print for March is expected to be released Tuesday.

China's new home prices rose at a slightly faster pace in April, according to data published Monday, adding to signs of gradual recovery in the property market as the government eases virus-busting restrictions on movement and re-opens the world's second-largest economy.

Eurozone’s ZEW economic climate index for May, US building permits and housing starts data for April and weekly crude inventory data from the American Petroleum Institute (API) will also be released Tuesday.