Macro Roundup (Sep 23)

Published: Sep 23, 2020 08:59 (GMT+8)
The dollar rose to an eight-week high on Tuesday, after a top Federal Reserve official struck a hawkish tone and said further quantitative easing may not provide additional lift to the U.S. economy.

SHANGHAI, Sep 23 (SMM) — This is a roundup of global macroeconomic news last night and what is expected today.

 

The dollar rose to an eight-week high on Tuesday, after a top Federal Reserve official struck a hawkish tone and said further quantitative easing may not provide additional lift to the US economy.

Speaking at a virtual meeting of the London-based Official Monetary and Financial Institutions Forum, Chicago Fed President Charles Evans said the US economy risked a longer, slower recovery, if not an outright recession without another fiscal support package. Evans also said he does not see open-ended quantitative easing as providing an important part of the answer. Evans is not a voter at the Federal Open Market Committee this year, but he will be in 2021.

 

On Wall Street, the major averages snapped multi-day losing streaks, all closing in the green. The Dow Jones Industrial Average climbed 140 points and the S&P 500 climbed 1.1%. The technology-heavy Nasdaq Composite was the relative outperformer, popping 1.7% as Amazon surged 5.7%.

But Stock gains were capped by concerns about an uptick in coronavirus cases in the UK paired with bleaker outlook for a second stimulus bill from the United States Congress. UK Prime Minister Boris Johnson announced Tuesday a tightening of economic restrictions and public health measures to slow the spread of Covid-19. Johnson said that the country was at a “perilous turning point.”

US coronavirus deaths topped 200,000 on Tuesday, according to data compiled by Johns Hopkins University.

With stimulus plans at a stalemate in Washington, Federal Reserve Chairman Jerome Powell on Tuesday reiterated to lawmakers that the US economy could begin to decelerate in the months ahead without further fiscal stimulus from Congress. Powell told the House Financial Services Committee that many economic forecasts underlies fiscal action. Powell also reassured investors that the central bank will support the economy “for as long as it takes.”

 

Oil rose on Tuesday, paring sharp overnight losses, as the latest tropical storm in the Gulf of Mexico lost strength, but worries about fuel demand persisted with flare-ups around the globe in coronavirus cases.

The American Petroleum Institute (API) reported late Tuesday that US crude supplies rose by 691,000 barrels for the week ended Sept. 18, according to sources. The API data also reportedly showed gasoline stockpiles dropped by 7.7 million barrels, while distillate inventories declined by 2.1 million barrels. 

 

The House passed a bill Tuesday that would fund the government into December and avoid a shutdown before a Sept. 30 deadline.

After clearing the House in an overwhelming vote, the legislation heads to the Republican-held Senate. Earlier Tuesday, House Speaker Nancy Pelosi said she reached a spending agreement with Treasury Secretary Steven Mnuchin and Republicans.

Pelosi said the proposal would include $8 billion for nutrition assistance for schoolchildren and families. It renews Pandemic EBT, a program that provides food benefits while schools are closed set to expire at the end of September, for a full year.

It also adds increased accountability for farm aid money to prevent it from gong to large oil companies, according to Pelosi. Senate Majority Leader Mitch McConnell had criticized a lack of farm assistance funds in a bill House Democrats released Monday.

 

Here’s a look at what’s on tap:

GfK German Consumer Climate (Oct)

German Manufacturing PMI (Sep) Prelim

Eurozone Manufacturing PMI (Sep) Prelim

US Manufacturing PMI (Sep) Prelim

Inventory data from the US Energy Information Administration (EIA)

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