Macro Roundup (Feb 18)

SHANGHAI, Feb 18 (SMM) — This is a roundup of global macroeconomic news last night and what is expected today.

The dollar rose on Wednesday as upbeat economic data and signs of strengthening inflation helped the greenback gain ground against a basket of world currencies.

U.S. retail sales, industrial output and producer prices data provided robust surprises to the upside, signaling the economic recovery from the pandemic recession is gaining momentum as vaccine deployment progresses.

The U.S. Federal Reserve released minutes from its Jan. 26-27 monetary policy meeting, in which participants expressed the need to “stay vigilant” amid recent signs of economic rebound, discussed expected near term inflation, and affirmed its commitment to keeping accommodative policy in place to support the ailing jobs market.

Consumers flocked to spend their stimulus checks in January, sending U.S. retail sales for the month up 5.3% in a blockbuster start to 2021, according to a government report Wednesday.

U.S. producer prices increased by the most since 2009 in January as the cost of goods and services surged, suggesting inflation at the factory gate was starting to creep up.

The producer price index for final demand jumped 1.3% last month, the biggest gain since December 2009 when the government revamped the series, the Labor Department said on Wednesday. That followed a 0.3% rise in December. In the 12 months through January, the PPI accelerated 1.7% after rising 0.8% in December.

On Wall Street, the Dow Jones Industrial Average closed 90.27 points higher at 31,613.02. The S&P 500 declined fractionally to finish its trading day at 3,931.33 while the Nasdaq Composite closed 0.58% lower at about 13,965.50.

Oil rose on Wednesday, buoyed by frigid Texas temperatures that curtailed production in the largest U.S. producing state, offset somewhat by reports that Saudi Arabia plans to increase output in the coming months.

Oil has been supported by OPEC+ supply curbs, Saudi Arabia’s additional cuts and hopes of a demand rebound due to COVID-19 vaccinations. Historic cold weather in Texas, which supplies the bulk of U.S. crude, has propelled prices higher in recent days.

Gold extended its slide to a fifth session on Wednesday, dipping to its lowest in more than two months as bets for an economic recovery boosted the dollar and benchmark U.S. Treasury yields.

U.K. inflation growth surprised to the upside in January, rising by 0.7% in annual terms on the back of higher food prices and lower discounting of household goods.

Stocks in Asia-Pacific edged higher in Thursday trade, as investors watch for movements in mainland Chinese stocks, which are set to return from the Lunar New Year holiday.

Key economic data slated for release today include US first-time filings for unemployment benefits in the week ended February 13, building permits and new house starts for January and Eurozone consumer price index (CPI) for January and consumer confidence index for February.