Macro Roundup (Jun 26)

SHANGHAI, Jun 26 (SMM) – This is a roundup of global macroeconomic news last night and what is expected today.

Last night

The US dollar rallied as Federal Reserve officials on Tuesday pushed back on market expectations and presidential pressure for the central bank to deliver a significant US interest rate cut as soon as its next meeting.

The dollar index, which measures the greenback against six major currencies, rebounded from a more than three-month low and gained 0.21% on the day to end at 96.185. 

"The Fed is insulated from short-term political pressures - what is often referred to as our 'independence'," Federal Reserve Chairman Jerome Powell said at the Council on Foreign Relations in New York. But Powell said he and his colleagues are "grappling" with whether current risks to the economy warrant a rate cut.

Base metals traded higher for the most part as LME zinc closed 1.8% higher, lead jumped 1.1%, nickel gained 1%, copper rose 0.9%, aluminium increased 0.7%, while tin fell 0.1%. SHFE zinc climbed 1.6%, nickel advanced 1.3%, copper rose 1%, lead jumped 0.4%, aluminium went up 0.3%, and tin nudged up. 

US home prices rose 0.4% from March to April, according to the Federal Housing Finance Agency’s monthly House Price Index (HPI) released on Tuesday. The HPI in April was also up 5.2% on the year.

Home prices are rising but not as fast as earlier this year, falling from February when the HPI was up 0.6%.

A key measure of the American economy, the Conference Board's consumer index, slipped this month after three consecutive months of increases as consumers saw the trade war with China as an increased risk. The index fell to 121.5 in June, the business research group said on Tuesday.

The drop brought the index to its lowest since September 2017.

"The escalation in trade and tariff tensions earlier this month appears to have shaken consumers’ confidence," Conference Board senior director Lynn Franco said.  "Although the Index remains at a high level, continued uncertainty could result in further volatility in the Index and, at some point, could even begin to diminish consumers’ confidence in the expansion."

Sales of new single-family homes sank unexpectedly in the US last month, hitting a five-month low even though prices fell and supplies rose, government data showed Tuesday.

The second straight monthly decline could point to weakening demand despite low mortgage rates. But a broad margin of error suggested the figure could be revised in the coming months.

Sales fell 7.8% in May to an annual rate of 626,000, seasonally adjusted, with sharp drops in the West and Northeast and tepid growth elsewhere.

The American Petroleum Institute (API) reported Tuesday that US crude supplies dropped by 7.55 million barrels for the week ended June 21. The API also reportedly showed a stockpile decline of 3.17 million barrels in gasoline, while distillate supplies rose by about 160,000 barrels. 

Day ahead

Germany will release data on its Gfk consumer confidence index for July, and the US will publish data on its wholesale Inventories and durable goods orders for May, as well as the weekly crude inventory data by the Energy Information Administration (EIA).

The US Federal Reserve Bank of St. Louis President James Bullard will give welcome remarks before the Homer Jones Memorial Lecture featuring Carmen Reinhart in St. Louis today.