Macro Roundup (Dec 4)

SHANGHAI, Dec 4 (SMM) — This is a roundup of global macroeconomic news last night and what is expected today.

The dollar plunged to its weakest level in more than 2-1/2 years on Thursday, while the euro held above $1.21, as signs of progress towards U.S. fiscal stimulus and optimism about COVID-19 vaccines kept investors upbeat.

Lawmakers in Washington have failed to reach an agreement on economic stimulus to help relieve the impact of COVID-19 in the United States, but there were early signs that a $908 billion bipartisan proposal could be gaining traction.

Risk appetite was also boosted by optimism about recent developments towards the roll-out of COVID-19 vaccines. The UK approved Pfizer Inc’s vaccine on Wednesday.

Stock futures were little changed in overnight trading on Thursday as investors awaited a key November jobs report to gauge the pace of labor market recovery in the face of a worsening pandemic.

Futures on the Dow Jones Industrial Average gained 60 points. S&P 500 futures were little changed and Nasdaq 100 futures traded 0.2% higher.

The rate of job gains likely slowed in November due to the spike in new coronavirus cases that led to fresh lockdown restrictions. The U.S. economy is expected to have added 440,000 jobs, compared 638,000 in October, according to Dow Jones. The unemployment rate is estimated to have decreased to 6.7% from 6.9%.

The latest weekly jobless claims hit a pandemic-era low, the Labor Department reported Thursday. First-time claims for unemployment benefits totaled 712,000 last week, compared with 787,000 a week earlier and the Dow Jones estimate of 780,000. Still, the claims remained well above the pre-pandemic record.

On Thursday, the stock market was hit by a report showing details about Pfizer’s coronavirus vaccine’s rollout. Major averages swiftly fell to their session lows after Dow Jones reported said Pfizer expects to ship half of the Covid-19 vaccines it originally planned for this year due to supply-chain problems.

Still, Pfizer and BioNtech are on track to roll out 1.3 billion vaccines in 2021 and the 50 million dose shortfall this year will be covered as production ramps up, the report said.

OPEC and non-OPEC allies, after days of tense discussions, agreed on Thursday to increase production by 500,000 barrels per day beginning in January. This will bring the total production cuts at the start of 2021 to 7.2 million bpd.

Following the meeting, international benchmark Brent crude futures traded 1.4% higher at $48.92 per barrel, while U.S. West Texas Intermediate futures settled 36 cents, or 0.8%, higher at $45.64 per barrel.

Both price contracts snapped a multiday losing streak in the previous session, closing higher on encouraging Covid-19 vaccine news. Oil prices remain more than 25% lower year to date.

Gold firmed on Thursday as the dollar fell and investors clung to hopes of an eventual breakthrough in negotiations over a fresh U.S. coronavirus aid package.

The expectations of a stimulus deal and continued optimism over COVID-19 vaccines kept the dollar index near a more than two-year low, buoying appeal for gold among investors holding other currencies.

Growth in China’s services sector accelerated in November as new business rose at the fastest pace in over a decade, a private survey showed on Thursday, pointing to a further recovery in consumer demand after the country curbed its coronavirus outbreak.

The Caixin/Markit services Purchasing Managers’ Index (PMI) rose to 57.8, the second highest reading since April 2010, from October’s 56.8. The 50-mark separates growth from contraction on a monthly basis.

Key economic data slated for release today include US non-farm employment for November, unemployment rate for November, and trade balance, factory orders and durable goods orders for October.