Macro Roundup (Jun 3)

SHANGHAI, Jun 3 (SMM) – This is a roundup of global macroeconomic news last night and what is expected in the day ahead.

The US dollar eased further on Tuesday while stocks on Wall Street extended their trek rally, as cheer over business reopenings continued to outweigh concerns about US-China tensions and mass protests across the US.

The dollar index, which gauges the greenback against a basket of major currencies, fell for a sixth straight day and plumbed the lowest since March 13 at 97.4335.

Optimism around reopening businesses, coupled with expectations that major producers will agree to extend output cuts during a video conference likely to be held this week, meanwhile, helped oil prices to continue their rally.

The Organization of the Petroleum Exporting Countries and others including Russia, a grouping known as OPEC+, are considering extending their production cuts of 9.7 million barrels per day (bpd), or about 10% of global production, into July or August, at a meeting expected to be held on June 4.

Oil prices surged in the morning of Asian hours on Wednesday in the wake of data from the industry group American Petroleum Institute (API) showing a decline in US crude supplies for last week.

The API reported late Tuesday that US crude supplies fell by 483,000 barrels for the week ended May 29. The API data also showed gasoline stockpiles edged up by 1.7 million barrels last week, while distillate inventories climbed by 5.9 million barrels. Inventory data from the Energy Information Administration (EIA) will be released Wednesday.

LME nonferrous metals, except for zinc, closed higher on Tuesday, with lead surging nearly 2.4% to lead the gains. Nickel jumped 2.2%, tin rose 1.7%, aluminium climbed 1.4% and copper advanced 0.6%.

SHFE nonferrous metals performed similarly in overnight trading. Nickel rose 1.4%, tin and copper advanced more than 1%, lead crept up 0.7% and aluminium inched up 0.3%, while zinc edged down 0.1%.

Australia’s central bank held rates at all-time lows on Tuesday and sounded less gloomy as the economy gradually reopens during what is likely to be the worst quarter since the Great Depression of the 1930s.

US private sector employment report from the ADP will be released on Wednesday. Analysts are expecting a loss of 8.75 million jobs in May. This comes after payrolls hemorrhaged more than 20 million jobs in April as companies sliced workers amid a coronavirus-induced shutdown that took most of the US economy offline. April marked the worst job loss in the history of the ADP report.

US Markit Services purchasing managers’ index (PMI) and ISM Non-manufacturing survey will also come out on Wednesday. 

Other economic data slated for release Wednesday include China’s Caixin/Markit Services PMI and Germany’s unemployment rate for May.