Macro Roundup (Apr 18)

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

Last night

The US dollar index rebounded to 89.4 from a low of 89.215 overnight. Most base metals rose. SHFE copper and nickel dipped, zinc rose over 1%. LME aluminium, zinc, and tin went up over 1%, lead and nickel inched up slightly. Only copper edged down.

China’s gross domestic product (GDP) grew 6.8% year on year in the first quarter, compared to 6.9% throughout 2017 and 6.8% in the fourth quarter of 2017, according to latest data from the National Bureau of Statistics on Tuesday April 17.

This growth was buoyed by retail sales, which beat expectations in March and rose 10.1% from a year ago. The final consumption expenditures accounted for 77.8% of the economic growth.

The January-March fixed asset investment grew slower to 7.5% from a year ago. Private investment in the period accelerated to 8.9% year on year. Total investment in property development in the first quarter saw the largest growth in three years and came in at 2.13 trillion yuan, up 10.4% from the same period last year.

Germany’s ZEW economic sentiment index, which measures investor confidence, slumped to -8.2 in April from 5.1 in March, below the expected -1. This marked the lowest level since November 2012. The current assessment component fell to 87.9 from 90.7 in March.

The eurozone’s ZEW economic sentiment also dropped sharply to 1.9 from 13.4 in March, a new low since July 2016.

ZEW noted in the statement that international trade tension with the US and the Syrian situation accounted for the poor performance. Germany also saw significant declines in production, exports and retail sales in the first quarter which exacerbated the effect on future economic development.

US housing starts rose 1.9% month on month to 1.319 million units, and permits for future construction of homes rose 2.5% to 1.354 million units in March.

Homebuilding grew more than expected in March, driven by a rebound in the construction of multi-family housing units, but weakness in the single-family segment suggested slowing growth in the overall housing market. Permits to construct single-family homes dropped 5.5% in March to 840,000 units, the lowest since September 2017.

The country’s industrial production rose 0.5% on a monthly basis in March as a rebound in utilities from February's weather-related decline offset sluggish output of machinery and food products

Inventories of US crude oil during the week ended April 13 dropped by 1.047 million barrels, according to data from the American Petroleum Institute. Gasoline inventories shrank by 2.473 million barrels and refined oil inventories fell by 530,000 barrels.

Day ahead

The eurozone Consumer Price Index (CPI) for March and the US weekly crude oil inventories from the Energy Information Administration are two key factors to watch today.

The US dollar is expected to remain weak while base metals are likely to trade rangebound during the day.

The seasonally adjusted eurozone CPI in March is estimated at 1.4, higher from the previous, but lower from the preliminary value. It is likely to drag down the euro if the figure meets the expectations.

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