Macro Roundup (Jun 8)

SHANGHAI, Jun 8 (SMM) – This is a roundup of global macroeconomic news last night and what is expected today.

Last night

The US dollar index extended its decline overnight and closed at 93.44.

LME aluminium dropped close to 2% while lead, nickel and tin rose some 1%. LME copper inched up and hit a fresh high in four and a half years as the worries lingered over supply from the Chile Escondida labour negotiation. SHFE metals fell across the board overnight except for copper.

China’s foreign exchange reserves in May dropped for a second straight month, to a seven-month low, as other currencies fell.

Reserves lost $14.23 billion in May to $3.11 trillion, the lowest since October, compared with a drop of $17.97 billion in April. The State Administration of Foreign Exchange (SAFE) said that the size of China’s foreign exchange reserves should remain stable overall.

The Eurozone's first-quarter seasonally adjusted gross domestic product (GDP) rose 0.4% over the quarter and 2.5% over the year, both in line with the expected and previously reported figures.

US initial claims for state unemployment benefits decreased 1,000 to 222,000 for the week ended June 2. Claims data for the prior week was revised to show 2,000 more applications received than previously reported.

The four-week moving average of initial claims, viewed as a better measure of labour market trends as it irons out week-to-week volatility, rose 2,750 to 225,500 last week.

Day ahead

Key factors to watch today include China's trade balance in May, the US wholesale inventories in April as well as the G7 Summit.

In the short term, the US dollar is likely to continue its weak and rangebound pattern while base metals are expected to continue their ranegbound pattern.

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