Macro Roundup (Apr 11)

SHANGHAI, Apr 11 (SMM) – This is a roundup of global macroeconomic news last night and what is expected today.

Last night

Despite potential lower tariffs indicated by Chinese President Xi Jinping, the US dollar edged down 0.23 to 89.6 overnight while the euro gained. Base metals rose across the board except for tin. LME aluminium climbed 3.7% to a record high in two months, driven by US sanctions and trade restrictions on Russian aluminium.

According to data by the exchanges on Monday April 9, eastern Europe accounted for 36% of LME aluminium inventories. The majority of this proportion is supplied by Russia. 

Boosted by higher medical fees and airfares, the US’ March producer price index (PPI) increased 0.3% month on month, up 0.1% from the expected and the previous value. Year on year growth hit a record high from November 2017, to stand at 3%, higher than the expected 2.9% and the previous 2.8%.

Producer prices for final demand, less foods, energy, and trade services, saw a month-on-month increase of 0.4%, and year-on-year growth of 2.9%. The latter is the highest growth rate since August 2014, up 2.7% in February. This also indicates a rise in the inflation this year. 

Wholesale inventories in the US for February grew 1% month on month, up from the expected 0.1%. According to the American Petroleum Institute (API), stocks of crude oil in the US increased 1.76 million barrels for the week ended April 6, higher than the expected 220,000 barrels. Stocks of gasoline were expected to shrink by 1.42 million barrels, but grew 2 million barrels. Refined oil inventories were down 3.85 million barrels, higher than the expected decline of 380,000 barrels. Oil prices edged down after the data was released, but remained at high levels. US crude oil closed at $65.57 per barrel overnight, up 3.4% from the previous day.

Day ahead 

Key factors to watch today include China's inflation data for March, the US' consumer price index (CPI) and the US Energy Information Administration's (EIA) crude oil inventory data.

China's inflation data in March failed to meet expectations. Compared with last month's 2.9%, the expected CPI in March registered 2.6% lower. PPI expectations for March also fell from last month's 3.7% to 3.3%.

Seasonal CPI data from the US, to be released tonight, is expected to come in at 2.4, up from the previous 2.2. Core CPI is expected at 2.1, up from the previous 1.8.  According to Bloomberg, US' core CPI for March is likely to grow by 2.1%, better than Federal Reserve's target of 2%. If such an expectation is met, the Federal Reserve may relook raising interest rates and this could support the US dollar in the short term.

Non-farm payroll data released last week did not perform well. 

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