Macro Roundup (Jun 8)

SHANGHAI, Jun 8 (SMM) – This is a roundup of global macroeconomic news last weekend and what is expected in the day ahead.

The US dollar rose slightly last Friday after data showed the US labour market unexpectedly improved in May, but the currency ended the week lower, for a third consecutive week. 

Uncertainties about the economic outlook and the possibilities of a second wave of the coronavirus infections capped the greenback’s gains.

The euro jumped on Friday to a three-month high after the European Central Bank (ECB) expanded its stimulus more than expected to prop up the economy. 

The central bank increased its emergency bond purchase scheme by a bigger-than-expected 600 billion euros to 1.35 trillion euros and extended the scheme until the middle of next year.

LME base metals closed mostly higher on Friday, with copper leading the gains and increased 2.43%. Tin rose 2.34%, nickel climbed 0.94%, aluminium went up 1.75%, lead expanded 1.27%, while zinc slipped 0.37%. 

SHFE nonferrous metals traded mixed on Friday night, as zinc lost 1.72%, lead fell 0.14%, while tin increased 1.5%, copper climbed 1.51%, aluminium advanced 0.91% and nickel gained 0.46%. Stainless steel added 0.58% and rebar grew 0.36%. 

The US employment  unexpectedly rose by 2.5 million in May and the jobless rate declined to 13.3%, according to data Friday from the Labor Department. The reading was far better than economists had been expecting and indicated that an economic turnaround could be close at hand.

OPEC and its oil-producing allies agreed on Saturday to extend the group’s historic production cut for an additional month, as an effort to help prop up the market as demand for crude begins to recover. The agreement was finalised during the group’s video-conference meeting.

The oil market displayed optimism over an agreement before the meeting. On Friday West Texas Intermediate increased 5.72% to settle at $39.55, while international benchmark Brent crude advanced 5.78% to settle at $42.3. It was each contract’s sixth straight week of gains, and the highest settle since March 6.

Baker Hughes on Friday reported that the number of active US rigs drilling for oil declined by 16 to 206 last week. The number of oil rigs had fallen on a weekly basis since mid-March, pointing to further declines in domestic crude output. 

The total active US rig count, meanwhile, also fell by 17 to 284, according to Baker Hughes.

China's foreign exchange reserves expanded to 3.1017 trillion US dollars at end-May, from 3.0915 trillion dollars at end-April, official data showed on Sunday.

China's forex market operated steadily last month, with demand and supply basically balanced, said Wang Chunying, spokesperson for the State Administration of Foreign Exchange. Wang attributed the increase in May to multiple factors including exchange rates and changes in asset prices.

China’s trade surplus surged to a record high in May as exports fell less than expected, supported by an increase in medical-related sales, and imports slumped along with commodity prices.

Exports decreased 3.3% in US dollar terms from a year earlier, beating economists’ estimates, while imports plunged 16.7%. That resulted in a trade surplus of $62.93 billion in May.

Key economic data slated for release today include Germany industrial output for April and the Eurozone Sentix investor confidence index for June.