Macro Roundup (Sep 6)

Published: Sep 06, 2021 09:00 (GMT+8)
The dollar weakened further against a basket of major currencies on Friday after a much softer than expected US payrolls report that is likely to keep the Federal Reserve on hold in scaling back its massive stimulus measures.

SHANGHAI, Sep 6 (SMM) — This is a roundup of global macroeconomic news last Friday night and what is expected today.

The dollar weakened further against a basket of major currencies on Friday after a much softer than expected US payrolls report that is likely to keep the Federal Reserve on hold in scaling back its massive stimulus measures.

Nonfarm payrolls increased by 235,000 in August, well short of the 728,000 forecast by economists in a Reuters poll, while the unemployment rate dipped to 5.2% from 5.4% in the prior month.

The dollar index dropped to a low of 91.941, its lowest level since Aug. 4, and was down 0.2% at 92.03 by 2:57 p.m. ET.

The dollar has been subdued on uncertainty over the path of Fed policy. Fed chair Jerome Powell said last Friday that while tapering of its stimulus could begin this year if job growth continues, the central bank was in no hurry to do so.

On Wall Street, the Dow Jones Industrial Average retreated on Friday and the S&P 500 slipped from a record high after the August jobs report came in short of expectations, showing the impact of the delta-fueled Covid resurgence.

The Dow lost 74.73 points, or 0.21%, to 35,369.09, while the S&P 500 edged lower by 0.03% to 4,535.43 after holding a slight gain in afternoon trading. The broader market index was supported by tech stocks, which helped to lift the Nasdaq Composite by 0.21% to 15,363.52.

Nonfarm payrolls increased by 235,000 in August, the Labor Department said Friday. Economists surveyed by Down Jones were expecting 720,000 jobs. The report marks a significant slowdown from July’s revised number of 1.053 million and comes as the delta variant of Covid-19 has led to health restrictions being put back in place in some states and cities.

Oil prices rose on Friday as a rebound in global demand was widely expected and a slow recovery for the US Gulf Coast export and refining hub from the hurricane earlier this week looked set to deplete stocks further.

Brent crude futures were up 39 cents, or 0.5%, to $73.42 a barrel at 1231 GMT, while US West Texas Intermediate (WTI) crude futures were up 21 cents or 0.3% at $70.20 a barrel. Both benchmark oil contracts were largely steady for the week.

About 1.7 million barrels per day of oil production remains shut in the US Gulf of Mexico, with damage to heliports and fuel depots slowing the return of crews to offshore platforms, sources told Reuters.

Gold advanced more than 1% to its highest in 2-1/2 months on Friday, as a slower-than-expected US jobs growth in August drove the dollar lower, casting doubts on the Federal Reserve’s tapering timeline.

Spot gold was up 1.2% at $1,830.71 per ounce by 1:33 p.m. ET,, after hitting its highest since mid-June at $1,833.80, on track to a fourth straight weekly gain.

US gold futures settled 1.2% higher at $1,833.7.

Euro zone business activity remained robust in August despite the impact of the Delta variant of Covid-19 and broad supply chain problems, according to Friday’s PMI readings.

US nonfarm payrolls increased by just 235,000 across the month of August, well short of the 720,000 new hires projected by economists surveyed by Dow Jones.

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Macro Roundup (Sep 6) - Shanghai Metals Market (SMM)