Macro Roundup (Apr 30)

SHANGHAI, Apr 30 (SMM) – This is a roundup of global macroeconomic news last night and what is expected in the day ahead. 

The US dollar declined on Wednesday after the Federal Reserve left interest rates unchanged and pledged to take more measures to shore up the economy that has been damaged by the coronavirus outbreak.

The dollar index, which tracks the greenback against a basket of other currencies, dipped 0.02% and ended at 99.501.

LME base metals ended mixed Wednesday. Copper led the increase with a rise of 0.72%. Zinc added 0.44%, lead increased 0.37%, while aluminium went flat, nickel slipped 0.08%, and tin lost 0.59%. 

SHFE nonferrous metals also traded in a mixed note on Wednesday. Copper regained losses from the previous day with a rebound of 0.5%, and aluminium advanced 1%. Zinc added 1.8% after supply disruptions concerns sent it to the highest level in two months. Lead slipped 0.69%, tin shed 0.76% and nickel dipped 0.4%.

“The Federal Reserve is committed to using its full range of tools to support the US economy in this challenging time, thereby promoting its maximum employment and price stability goals,” the central bank said in a statement at the end of a two-day policy meeting.

The Fed’s statement came after official data earlier on Wednesday showed that the US economy contracted in the first quarter.

The Commerce Department said US gross domestic product (GDP) fell at a 4.8% annualised rate in January-March after expanding at a 2.1% rate in the final three months of 2019.

This marked the first negative GDP reading since the 1.1% decline in the first quarter of 2014 and the lowest level since the 8.4% plunge in Q4 of 2008 during the worst of the financial crisis.

Consumer expenditures, which comprise 67% of total GDP, decreased 7.6% in the quarter as all nonessential stores were shut down and the cornerstone of the US economy was taken almost completely out of commission. Durable goods spending tumbled 16.1% while expenditures on services dropped 10.2%.

Oil futures ended higher on Wednesday, with US benchmark prices rallying 22% as data showed a slightly smaller-than-expected weekly climb in domestic crude supplies, along with declines in gasoline stocks and oil production.

West Texas Intermediate crude for June delivery rose $2.72, or 22%, to settle at $15.06/barrel on the New York Mercantile Exchange. 

The Energy Information Administration (EIA) reported that US crude inventories rose 9 million barrels for the week ended April 24. That marked a 14th consecutive weekly rise, but was slightly lower than the expected average increase of 9.8 million barrels.

Gasoline supply fell by 3.7 million barrels, while distillate stockpiles added 5.1 million barrels, the EIA said.

US home sales took a deep dive in March, falling by the most since 2010, as the coronavirus forced people to stay at home and the economy spiralled down.

Signed contracts to purchase existing homes, referred to as pending home sales, fell 20.8% from February and were 16.3% lower annually, according to the National Association of Realtors.

Inflation in Germany, as measure by the consumer price index (CPI), is expected to be 0.8% on a yearly basis in April, the preliminary data published by Destatis showed. The reading followed March's 1.3% and came in higher than the market expectation of 0.6%.

Key economic data slated for release today include China’s official and Caixin manufacturing purchasing managers' index (PMI) for April, Germany’s retail sales for March and unemployment rate for April, the eurozone CPI for April and the Q1 GDP, as well as the US weekly jobless claims and the PCE price index for March.