Macro Roundup (Oct 15)

Published: Oct 15, 2020 08:59 (GMT+8)
The dollar index retreated on Wednesday, a day after notching its biggest daily percentage gain in three weeks and the euro touched a nine-day low, as global equity markets remained cautious in light of waning hopes for a COVID-19 vaccine or US fiscal stimulus.

SHANGHAI, Oct 15 (SMM) — This is a roundup of global macroeconomic news last night and what is expected today.

 

The dollar index retreated on Wednesday, a day after notching its biggest daily percentage gain in three weeks and the euro touched a nine-day low, as global equity markets remained cautious in light of waning hopes for a COVID-19 vaccine or US fiscal stimulus.

 

Oil prices strengthened on Wednesday, as equities also rose and the dollar traded lower, even as concerns loomed that recovery in fuel demand will be stalled by soaring global coronavirus cases.

The American Petroleum Institute (API) reported on Wednesday a major draw in crude oil inventories of 5.421 million barrels for the week ending October 9.

The API reported a draw in gasoline inventories of 1.513-million barrels of gasoline for the week ending October 9—compared to the previous week’s 867,000-barrel draw.

Distillate inventories were down by 3.930 million barrels for the week, compared to last week’s 1.033-million-barrel draw, while Cushing inventories rose by 2.199-million barrels.

 

Gold gained 1% on Wednesday, rebounding from a sharp decline in the previous session, boosted by a weaker dollar and uncertainties surrounding the US election and global economic recovery boosted the safe haven metal’s allure.

 

On Wall Street, US stock futures were flat on Wednesday night as traders continued to weigh the prospects for a coronavirus aid deal being reached before next month’s election.

Dow Jones Industrial Average futures were up just 17 points, or 0.1%. S&P 500 futures rose marginally and Nasdaq 100 futures dipped 0.1%.

Treasury Secretary Steven Mnuchin said on Wednesday that reaching a coronavirus stimulus deal before the election would be difficult as Democrats and Republicans remain far apart on certain issues. His comments came after House Speaker Nancy Pelosi, D-Calif., said earlier this week that a recently proposed package by the administration “falls significantly short” of what is needed.

The uncertainty surrounding the aid talks led to the market’s second straight daily decline. The Dow slid more than 160 points, or 0.6%. The S&P 500 and Nasdaq Composite pulled back by 0.7% and 0.8%, respectively. Wednesday marked the first time since September that the major indexes posted consecutive daily losses.

 

Investors reacted to a speech by Chinese President Xi Jinping in Shenzhen on Wednesday, as the Shenzhen Special Economic Zone celebrated the 40th anniversary of its establishment.

Xi emphasized the importance of protecting the “legitimate rights and interests of entrepreneurs, property rights as well as intellectual property rights in accordance with the law,” according to a translation of his speech. That would “motivate entrepreneurs to start up and develop their businesses,” he said.

State media outlet Xinhua reported Sunday that the country “unveiled a new comprehensive reform plan for Shenzhen,” giving local authorities there a “more direct and greater say in business” in areas such as carrying out market-based economic reforms.

 

Investors are also considering the global economic outlook after the International Monetary Fund revised its forecasts for economic growth this year. The global economy is now projected to contract by 4.4% in 2020 — an upward revision from an estimate of -4.9% made in June (which itself was revised to -5.2% due to a new methodology used by the IMF).

 

Key economic data slated for release today include China’s consumer price index (CPI) for September, US initial claims for jobless benefits in the week ended October 10, import price index for September and inventory data from the US Energy Information Administration (EIA).

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