Macro Roundup (Oct 14)

SHANGHAI, Oct 14 (SMM) – This is a roundup of global macroeconomic news last Friday and what is expected in the day ahead.

Last weekend

The US dollar weakened on Friday against a basket of other currencies after US President Donald Trump said China and the US reached the first phase of a substantial trade deal that delays tariff hikes that were set to kick in this week.

US Treasury Secretary Steven Mnuchin said both sides struck an “almost complete agreement” on currency and financial services issues.

The progress in US-China trade talks boosted China’s yuan and the Australian dollar, often seen as barometers of investor risk appetite, while the British pound was buoyed by hopes for a Brexit resolution.

Irish Prime Minister Leo Varadkar said a Brexit deal could be clinched by the end of October to allow the United Kingdom to leave the European Union, after what he called a very positive meeting with Britain’s Boris Johnson.

Oil prices jumped on Friday after Iranian state media said that two rockets had struck an Iranian tanker traveling through the Red Sea off the coast of Saudi Arabia.

LME base metals, except for aluminium and nickel, drifted higher on Friday. Zinc led the gains with a 2.3% increase. Tin rose 1.2%, lead advanced 1.1%, and copper increased by 0.4%.

The SHFE complex also saw mixed performance on Friday night. Lead rose 0.7%, zinc advanced 0.6%, and copper climbed 0.4%, while tin dipped 0.1%, nickel slipped 0.2%, and aluminium shed 0.6%.

On the data front, US import prices increased 0.2% last month, driven by higher petroleum costs, the Labor Department said on Friday. On a yearly basis, import prices decreased 1.6%.

Import prices for goods excluding oil were 0.1% lower, suggesting that imported inflation could remain subdued.

The University of Michigan’s preliminary sentiment index among American consumers advanced to a three-month high of 96 from September’s 93.2, data showed Friday.

Baker Hughes on Friday reported that the number of active US rigs drilling for oil rose by two to 712 this week, after declining for seven consecutive weeks. The total active US rig count, meanwhile, also edged up by one to 856.

German consumer prices rose 1.2% year on year in September, but remained unchanged from a month ago, according to the Federal Statistical Office.

Day ahead

China will release its trade data for September this morning.