Macro Roundup (Jun 12)

SHANGHAI, Jun 12 (SMM) – This is a roundup of global macroeconomic news last night and what is expected in the day ahead.

The US dollar gained on Thursday as US stocks plunged amid reduced expectations that the global economy would recover swiftly from the coronavirus pandemic, following Wednesday’s economic outlook from the Federal Reserve.

All three major US stock indexes were down about 5%, posting their worst day since mid-March.

LME and SHFE base metals closed lower across the board overnight, with LME nickel leading the losses with a drop of 2.77%. LME copper lost 2.56%, aluminium slipped 2.03%, zinc fell 1.8%, lead dipped 0.34% and tin dropped 1.63%. 

SHFE copper shed 1.65%, aluminium declined 0.8%, zinc went down 1.42%, nickel dropped 1.9%, lead eased 1.54% and tin ended down 1.12%. 

The US Federal Open Market Committee (FOMC) kept its interest rates unchanged at a target range of 0 to 0.25% – much to the expectation of analysts – as the pandemic continues to pose considerable risks.

The Committee predicted they would keep interest rates close to zero at least till 2022, as the US central bank indicated it would take years to bring joblessness back down to the pre-coronavirus pandemic level.

On the data front, the pace of US unemployment claims slowed again last week, Labor Department data showed Thursday. Initial claims totalled 1.54 million, compared with the expectations of 1.6 million and a plunge of 355,000 from the previous week’s total just shy of 1.9 million. 

Weekly initial jobless claims have decelerated for 10 consecutive weeks. The four-week moving average, which smooths volatility in the numbers fell by 286,250 to 2 million.

Still, the number of initial jobless claims remained at historically high. It is more than twice that of the pre-coronavirus record set in 1982.

The US producer price index (PPI) for final demand rose 0.4% in May, seasonally adjusted, after plunging 1.3% in April, which was the biggest decrease since the series was revamped in December 2009, the US Department of Labor said Thursday.

Excluding the volatile food, energy and trade services components, producer prices edged up 0.1% in May after falling 0.9% in April, the biggest drop since the introduction of the series in September 2013. The so-called core PPI had declined for three straight months.

Key economic data slated for release today include the US import price index for May and the University of Michigan consumer sentiment index for June.