Macro Roundup (Oct 9)

SHANGHAI, Oct 9 (SMM) — This is a roundup of global macroeconomic news last night and what is expected today.

The US dollar was little changed against a basket of currencies on Thursday as investors waited for fresh news on whether new US fiscal stimulus is likely in the near term.

The greenback has been whipsawed by swings in risk sentiment after US President Donald Trump on Tuesday halted negotiations with Democrats on a new economic package, but later pushed for the approval of more targeted stimulus bills to offset economic damage from the coronavirus.

US House of Representatives Speaker Nancy Pelosi said on Thursday said legislation to help airline companies survive the fallout from the coronavirus pandemic was a matter of national security and could only move through Congress with guarantees that lawmakers will work on a more comprehensive aid bill.

Oil climbed on Thursday on support from output shutdowns ahead of a storm in the US Gulf of Mexico and the prospect of more supply losses in Norway.

Oil and gas workers have withdrawn from offshore US Gulf production facilities as Hurricane Delta was forecast to intensify into a powerful, Category 3 storm. Nearly 1.5 million barrels of daily output was halted.

Oil also gained support from the prospect of more production outages in the North Sea because of a workers’ strike. The major Johan Sverdrup field will have to shut unless the strike ends by Oct. 14. The production losses offset concerns about demand, rising coronavirus cases and rising US crude inventories.

Renewed optimism over some U.S. coronavirus relief aid also supported the market. After shutting down talks over a larger US stimulus deal, President Donald Trump wrote on Twitter that Congress should pass funding for airlines, small businesses and stimulus checks for individuals, fuelling hopes for relief.

US stock futures rose on Thursday night as Wall Street continued to search for clarity surrounding a new potential fiscal aid bill.

Dow Jones Industrial Average futures were up 121 points, or 0.4%. S&P 500 and Nasdaq 100 futures gained 0.4% and 0.3%, respectively.

Drew Hammill, deputy chief of staff to Nancy Pelosi, tweeted that the House Speaker and Treasury Secretary Steven Mnuchin spoke for 40 minutes earlier in the day. He noted that the conversation “focused on determining whether there is any prospect of an imminent agreement on a comprehensive bill. The Secretary made clear the President’s interest in reaching such an agreement.”

That tweet came after Pelosi told reporters she would not back aid to US airlines without a broader stimulus package, something Trump hinted earlier in the week he’d support. Meanwhile, Trump told Fox Business on Thursday morning that the administration and Democrats were “starting to have some very productive talks.”

“Stimulus talks are really dictating the market action on a day-to-day basis,” said Keith Buchanan, portfolio manager at GLOBALT. Buchanan noted that the recent rhetoric indicates some progress in the negotiations, but added it is key for Washington to move “quickly” on the matter to “to relieve the pressure that the economy is under.”

US data on Thursday showed fewer Americans filed new claims for jobless benefits last week, but the number remained stubbornly high. Initial jobless claims filed through state programs slid to 840,000 in the week ended Oct. 3 from a revised 849,000 in the prior week, the Labor Department said Thursday.

Gold edged up on Thursday as uncertainty about the US presidential election and bets that fresh stimulus would drive inflation offset investors’ improved appetite for riskier assets.

German exports rose for the fourth consecutive month, growing 2.4% in August after a 4.7% rise in July, according to figures released Thursday by the Federal Statistics Office.

China’s Caixin/Markit services Purchasing Managers’ Index is expected to be out at around 9:45 a.m. HK/SIN. The data could provide more clues on the state of China’s economic recovery from the coronavirus pandemic.