Macro Roundup (Oct 29)

SHANGHAI, Oct 29 (SMM) — This is a roundup of global macroeconomic news last night and what is expected today.

The safe-haven dollar rose on Wednesday, pushing the euro to one-week lows on prospects of a national lockdown in Germany and France as coronavirus cases surged, with implied volatility gauges in the common currency and the yen hitting multi-month highs as traders positioned for next Tuesday’s US election.

Germany and France were preparing to announce restrictions approaching the level of last spring’s blanket lockdowns on Wednesday as COVID-19 deaths across Europe rose almost 40% in a week, while financial markets tumbled on fears of the likely economic costs.

The European Commission proposed on Wednesday a series of new measures to fight the COVID-19 pandemic in the European Union, saying the new spike in infections on the continent was “alarming”.

US stock futures climbed on Wednesday night after the worst day for the market in several months.

Futures tied to the Dow Jones Industrial Average gained about 220 points, or 0.8%. Those for the S&P 500 and the Nasdaq 100 rose about 0.7% and 0.6%, respectively.

The move in futures comes after a sharp sell-off during Wednesday’s session that extended Wall Street’s losing streak. The Dow lost 934 points, or 3.4%, for its fourth-straight negative day and worst loss since June 11. The S&P 500 also saw its worst day since June 11, falling 3.5% for its third-straight negative session.

The tech-heavy Nasdaq Composite suffered a slightly larger loss at 3.7% after advancing modestly in the prior session, marking its worst performance since Sept. 8.

Gold fell as much as 2% and silver nearly 6% on Wednesday as investors flocked to the dollar in the absence of signs of any imminent US fiscal stimulus measures to ease the economic blow from the COVID-19 pandemic.

Spot gold hit its lowest since Sept. 28 at $1,869.21 per ounce before recovering to $1,881.41. US gold futures fell 1.5% to $1,882.70.

Silver slumped as far as $23, its lowest since Oct. 7.

“The metals were so dependent on more stimulus at this point and the bear camp is fully in control right here,” said Bob Haberkorn, senior market strategist at RJO Futures.

“Overall, the gold market is lower on a strengthening dollar due to the lack of stimulus measures and risk-off mentality heading into this election.”

Oil prices fell over 5% to a three-week low on Wednesday as surging coronavirus infections in the United States and Europe are leading to renewed lockdowns, fanning fears that the unsteady economic recovery will deteriorate.

The Energy Information Administration (EIA) reported Wednesday that US crude inventories rose by 4.3 million barrels for the week ended Oct. 23. That followed declines in each of the previous two weeks.

In vaccine news, Pfizer said Tuesday that data from a late-stage trial of its vaccine developed alongside Germany’s BioNTech will likely not be available until after the Nov. 3 U.S. election, while EU officials have said vaccines are unlikely to be available across Europe until 2022.

Key economic data slated for release today include Germany unemployment rate after adjustments and consumer price index (CPI) for October, Eurozone consumer confidence index and economic climate index for October, and US initial claims for unemployment benefits in the week ended October 24.