Macro Roundup (May 26)

SHANGHAI, May 26 (SMM) – This is a roundup of global macroeconomic news last night and what is expected in the day ahead.

The US dollar edged higher against a basket of rivals on Monday, while oil prices eased on concerns over rising tensions between the US and China over Beijing’s plans to impose security laws on Hong Kong and the possibility of sanctions from Washington.

Financial markets in Singapore, Britain and the US were closed on Monday for public holidays.

SHFE nonferrous metals traded mixed on Monday night. Lead and copper advanced about 0.6%, aluminium gained 0.2%, while nickel inched down 0.06%, zinc fell 0.4% and tin shed 0.6%.

On the LME, nonferrous metals, except for zinc and nickel, moved higher after trading was resumed on Tuesday.

White House National Security Advisor Robert O’Brien said Sunday the U.S. will likely impose sanctions on China if Beijing implements national security law that would give it greater control over autonomous Hong Kong.

On the coronavirus front, American biotech company Novavax said Monday it started the first human study of its experimental coronavirus vaccine. The company said it expects initial results on safety and immune responses in July. Last week, another biotech Moderna reported positive development on its vaccine trial where all 45 participants had developed coronavirus antibodies.

Japan’s Prime Minister Shinzo Abe announced Monday that the state of emergency declared over the novel coronavirus crisis is over in Japan, ending curbs on economic activity in Tokyo and four other prefectures as experts judged the spread of infections is now under control, according to Kyodo News.

Singapore drastically downgraded its economic forecast for 2020 after its coronavirus-hit economy contracted in the first quarter of the year, official data showed on Tuesday.

The Singapore economy is now expected to shrink by between 4.0% and 7.0% this year, according to the Ministry of Trade and Industry. That’s the third official downgrade in economic forecasts this year. The last projection was for a gross domestic product contraction of between 1.0% and 4.0%.

The German economy posted its largest decline in output since the financial crisis in the first quarter and entered a recession due to the coronavirus pandemic and the lockdown implemented in mid-March, the German statistics office Destatis said Monday, confirming a preliminary estimate.

As previously reported, GDP (gross domestic product)—the broadest measure of goods and services produced in an economy--contracted 2.2% in the first quarter compared with the previous quarter. GDP fell 2.3% on year in the first quarter on a calendar and price-adjusted basis, Destatis said, confirming the first estimate.

This is the second largest decrease since German unification, following a 4.7% decline in the first quarter of 2009, Destatis said.

German Ifo business climate index came in at 79.5 in May, firmer than last month's 74.2 while beating the consensus estimates pointing to a reading of 78.3.

Meanwhile, the current economic assessment arrived at 78.9 points in the reported month as compared to last month's 79.4 and 80.0 anticipated.

On the other hand, the Ifo expectations index – indicating firms’ projections for the next six months, came in at 80.1 for May, up from the previous month’s 69.4 reading and better than the market expectations of 75.0.

Germany’s Gfk consumer confidence index for June, US FHFA home price index for March, the Conference Board's consumer confidence index for May and weekly crude inventory data from the American Petroleum Institute (API) are slated for release on Tuesday.