Macro Roundup (Jan 19)

SHANGHAI, Jan 19 (SMM) — This is a roundup of global macroeconomic news last night and what is expected today.

The dollar clung to gains on Monday and the Japanese yen edged higher as softening US economic data and rising global coronavirus cases kept investors cautious, while lockdowns and Italian political turmoil held the euro under pressure.

The euro dipped to a six-week low of $1.2066 in Asia and fell to a one-month low of 125.20 yen. The yen was last up about 0.2% at 103.70 per dollar and it also rose on the risk-sensitive Australian and New Zealand dollars.

The Antipodeans were soft against the greenback and the Aussie touched a one-week trough of $0.7679, while the kiwi hit a three-week low of $0.7117.

Better-than-expected Chinese economic data headed off further selling, but was not enough to shift currency traders' mood.

On Wall Street, US stock futures moved modestly higher on Monday evening as Wall Street looked to bounce back from a rough week ahead of President-elect Joe Biden's inauguration.

Futures contracts tied to the Dow Jones Industrial Average rose 90 points, or 0.3%. Those for the S&P 500 and the Nasdaq 100 added 0.4% and 0.3%, respectively.

The move in futures comes after a slump for equities last week. The Nasdaq Composite and S&P 500 lost 1.5%, while the Dow was off 0.9%, respectively. It was the worst week for the three major indexes since October.

The disappointing week for stocks came as Biden unveiled his $1.9 trillion plan for economic relief as the country tries to get a handle on the Covid-19 pandemic. Biden is set to be inaugurated on Wednesday, with the National Guard in Washington amid heightened security concerns after a Jan. 6 riot at the U.S. Capitol.

Oil prices on Monday fell further from 11-month highs touched last week, ending a rally that started at end-October on production cuts and strong Chinese demand, with the market’s outlook questioned as coronavirus infections rise.

Brent crude fell 30 cents, or 0.5%, to $54.79 a barrel by 0622 GMT, after dropping 2.3% on Friday. U.S. oil was down by 21 cents, or 0.4%, at $52.15 a barrel, having declined 2.3% in the previous trading session.

The benchmarks had rallied in recent weeks, buoyed by the start of Covid-19 vaccine rollouts and a surprise cut of crude output by the world's biggest oil exporter, Saudi Arabia. Surging new infections throughout the world, however, have raised doubts about how long demand would hold up.

“The Relative Strength Indexes (RSI's) on both contracts were in overbought territory, indicating a correction was on its way,” said Jeffrey Halley, senior market analyst at OANDA.

Gold prices dropped to their lowest in 1-1/2 months on Monday, as a stronger U.S. dollar made bullion expensive for other currency holders, despite expectations of a large Covid-19 relief package in the United States.

Spot gold fell 0.3% to $1,820.46 per ounce by 0048 GMT, having fallen to their lowest since Dec. 2, 2020 at $1,809.90 earlier in the session. US gold futures eased 0.7% to $1,816.80.

The US dollar strengthened to its highest in four weeks against rival currencies.

US President-elect Joe Biden said on Friday he wants 100 million Covid-19 vaccine shots during his first 100 days in office, a day after unveiling a $1.9 trillion stimulus package proposal to jump-start the economy.

Key economic data slated for release today include Germany December CPI annual rate, Germany ZEW Economic Sentiment Index for January and Eurozone ZEW Economic Sentiment Index for January.