Macro Roundup (Sep 13)

SHANGHAI, Sep 13 (SMM) – This is a roundup of global macroeconomic news last night and what is expected today.

Last night

The US dollar index slid against a basket of other currencies as investors cut safe-haven holdings of the greenback, following a report that senior US officials were seeking to jumpstart trade talks with China. The rebound in the euro and pound also weighed on the US dollar.

Base metals, except for SHFE aluminium, gained across the board, buoyed by rising oil prices. Concerns of short supplies bolstered oil prices to rally to its highest level this year. LME nickel surged 3.4%, lead jumped 3.19%, zinc shot up 2.97%, and copper grew 1.99%. SHFE nickel soared 2.28%, zinc gained 1.99%, cooper increased 1.56%, and lead went up 1.28%.

China’s total social financing (TSF), a broad measure of credit and liqudity in the economy, rose to 1.52 trillion yuan in August from 1.04 trillion yuan in July. The People's Bank of China revised its TSF calculation by including financial institutions’ asset-backed securities and loan write-offs.  

The M2, a broad measure of money supply that covers cash in circulation and all deposits, rose at a slower rate of 8.2% year on year to 178.87 trillion yuan at the end of August. 

Fewer deposits from non-bank financial institutions affected growth of the M2 money supply. Since the net supply of new general and project-based local government bonds has risen, non-bank financial institutions might have shifted their banks’ deposits to bond purchases.

The US producer price index (PPI) for final demand fell unexpectedly by 0.1% in August, seasonally adjusted, the US Department of Labor reported on Wednesday. This marked the first drop in a year and a half, as declines in the prices of food and a range of trade services offset higher costs of energy products. 

On a yearly basis, the PPI rose 2.8%, slowing further after an increase of 3.3% in July. Despite the moderation in producer prices last month, overall inflation is steadily rising against the backdrop of a strong labour market and a robust economy. 

The Energy Information Administration (EIA) said on Wednesday that US crude oil inventories shrank by 5.3 million barrels for the week ended September 7. This compared with an expected drop of 2 million barrels. 

Day ahead

Market participants should monitor data including the European Central Bank’s refinancing rate this month, the US consumer price index (CPI) for August, as well as its weekly jobless claims.