Macro Roundup (Oct 9)

SHANGHAI, Oct 9 (SMM) – This is a roundup of global macroeconomic news last night and what is expected today.

Last night

The US dollar retained its recent gains overnight on upbeat domestic economic data and safe-haven demand with geopolitical concerns.

The euro fell to a seven-week low against the dollar on Monday as Italy and the European Commission headed for a clash about Rome's budget plan. Brussels has expressed concern about Rome's budget plan because it would exacerbate the nation's budget deficit more than expected, for the next three years. Rome is required to submit a draft budget to the commission, which will examine if it remains in line with EU rules, by October 15.

The yuan weakened as Beijing's move to spur lending failed to ease concern about economic growth.

SHFE base metals ended in positive territory across the board overnight. Copper gained 0.62%, aluminium rose over 1.4%, lead edged up 0.3%, zinc surged close to 2.6%, nickel jumped over 1.8% and tin nudged up 0.05%.

China's services sector in September grew at its fastest in three months as demand picked up, showed the latest Caixin business report released on Monday. Growth occurred even as sentiment worsened as firms started cutting jobs following two years of expansion while rising cost pressures squeezed profit margins.

The Caixin services purchasing managers' index (PMI) rose to 53.1 in September from 51.5 in August, and has remained above 50, a level that separates growth from contraction.

"The data indicated that an improved services sector performance was broadly offset by softer manufacturing growth," Caixin said.

Germany’s industrial output for August dipped 0.3% from July, well under the expectation of a rebound of 0.3%. The fall was, however, less severe than in July when industrial production dropped 1.1%. On a yearly basis, industrial for August declined 0.1%, in line with the expectations, compared to an increase of 1.1% in July.

Investor morale in the eurozone fell more than expected in October, a survey showed on Monday, as concerns about Italy's fiscal policies and tighter scrutiny of the automobile industry's compliance with emissions rules weighed on sentiment.

Sentix's index for the eurozone fell to 11.4 from 12 points in September.

Day ahead

Some data to monitor today include China’s total social financing (TSF) and M2 money supply in September and Germany’s trade balance in August.

Market participants should also monitor comments from Federal Reserve Bank of New York President John Williams.