Macro Roundup (Oct 19)

SHANGHAI, Oct 19 (SMM) — This is a roundup of global macroeconomic news last night and what is expected today.

The dollar edged lower against a basket of currencies on Friday, paring some of the week’s gains built on increased caution over a global surge in coronavirus cases and fading prospects for a US stimulus package before the Nov. 3 election.

The greenback pared some of the day’s losses after strong US retail sales data helped assuage concerns about the health of the US consumer.

The US dollar index was 0.1% lower at 93.676. The index is up 0.7%, for the week, its best weekly gain in three weeks.

Fresh restrictions to combat COVID-19 have been introduced across Europe, and the US Midwest is battling spikes in new cases, threatening to derail the country’s economic recovery from the coronavirus shock.

US relief plans remain bogged down in a three-way negotiation between the White House, Senate Republicans and House Democrats.

The US budget deficit hit a record $3.132 trillion during fiscal 2020, more than triple the 2019 shortfall, as a result of massive coronavirus rescue spending, the US Treasury said on Friday.

Oil prices edged lower on Friday, dragged down by concerns that a spike in COVID-19 cases in the United States and Europe will continue to drag on demand in two of the world’s biggest fuel-consuming regions.

OPEC+, a grouping of the Organization of the Petroleum Exporting Countries and ally producers including Russia, fear a prolonged second wave of the pandemic and a jump in Libyan output could push the oil market into surplus next year, a much gloomier outlook than just a month ago.

Some European countries were reviving curfews and lockdowns to fight a surge in new coronavirus cases, with Britain imposing tougher COVID-19 restrictions in London on Friday.

In the United States, drillers have begun adding oil rigs since cutting them to a 15-year low in August. Last week, they added the most oil rigs in a week since January, increasing the count by 12 to 205, energy services firm Baker Hughes Co said.

Gold fell and was on the way to its first weekly decline in three weeks on Friday, as fading chances of a US stimulus agreement before the Nov. 3 presidential election dented the metal’s appeal as an inflation hedge.

On Wall Street, US stock futures rose on Sunday night as the number of newly confirmed coronavirus cases continues to rise while lawmakers remain at an impasse over a new stimulus deal.

Dow Jones Industrial Average futures were up 131 points, or 0.5%. S&P 500 and Nasdaq 100 futures rose 0.5% and 0.7%, respectively.

In Washington, House Speaker Nancy Pelosi’s office said Saturday evening that she is giving the Trump administration 48 hours to reach an aid deal before the Nov. 3 election. Pelosi and Treasury Secretary Steven Mnuchin continued their discussions over the weekend. They agreed to speak again Monday.

Fresh data showed that US retail sales jumped 1.9% in September, smashing a Dow Jones estimate of 0.7%. Excluding autos, sales were up 1.5%, better than a 0.4% estimate.

UK Prime Minister Boris Johnson said he would seek a no-deal Brexit unless there was a fundamental change of approach from the European Union.

What’s on tap:

China: Third quarter GDP, industrial production, retail sales and fixed asset investment data for September at 10:00 a.m. HK/SIN