Macro Roundup (Oct 21)

SHANGHAI, Oct 21 (SMM) — This is a roundup of global macroeconomic news last night and what is expected today.

The US dollar dipped on Tuesday, hitting a one-month low against a basket of major currencies, as investors awaited the outcome of fiscal stimulus talks ahead of the upcoming US presidential election and coronavirus cases spiked in Europe.

The dollar index declined for a second day, with the safe-haven currency hitting 92.991, its lowest since Sept. 21, as House Speaker Nancy Pelosi was optimistic Democrats could reach a deal with the Trump administration on additional COVID-19 relief that could get aid out by early next month.

On Wall Street, US stock index futures rose in overnight trading on Tuesday after White House Chief of Staff Mark Meadows said that House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin have made “good progress” on stimulus talks, before adding that they “still have a ways to go” before an agreement is reached.

Futures contracts tied to the Dow Jones Industrial Average rose 124 points, indicating a more than 100-point rally at the open on Wednesday. S&P 500 futures traded 0.5% higher, while Nasdaq 100 futures advanced 0.6%.

Mnuchin and Pelosi’s conversation Tuesday continued a desperate attempt to hash out an agreement before the Nov. 3 election. Democrats and the Trump administration have struggled for months to overcome fundamental disagreements over additional stimulus measures — including the dollar amount — as the economy continues to feel the burden of the coronavirus pandemic.

A slew of companies reported quarterly earnings after the bell on Tuesday, most notably Netflix. Shares of the streaming giant slipped more than 6% after the company missed earnings estimates, and reported fewer-than-expected subscriber additions. On the other hand, shares of Snap jumped more than 23% after the company reported a surprise earnings beat.

Oil edged up on Tuesday on hopes that the United States was nearing a stimulus deal, but the threat to demand from rising coronavirus cases worldwide and increased Libyan output kept prices from moving higher.

The American Petroleum Institute reported late Tuesday that US crude supplies rose by 584,000 barrels for the week ended Oct. 16, according to sources. The data also reportedly showed gasoline stockpiles fell by 1.6 million barrels, while distillate inventories were down by about 6 million barrels.

Gold edged higher on Tuesday as the dollar weakened and hopes for a US coronavirus aid package ahead of the presidential election boosted bullion’s appeal as an inflation hedge.

"Gold markets are in a wait-and-see mode in regards to the stimulus plan. It would appear that Republicans and Democrats are still at odds over certain topics within the language,” said David Meger, director of metals trading at High Ridge Futures. “However, the market still holds out some hope that some type of stimulus plan could get done ... (Stimulus) is clearly the most important factor for the market in the short term.”

US single-family homebuilding surged to a more than 13-year high in September amid record-low mortgage rates and a migration to the suburbs and low-density areas in search of more room for home offices and schooling.

Inventory data from the US Energy Information Administration (EIA) will be released today.