Macro Roundup (Dec 9)

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

The dollar edged higher on Tuesday in choppy trading, taking a breather from a sell-off that took it to its lowest level in more than 2-1/2 years last week, while sterling slipped as investors awaited the outcome of Brexit trade-deal talks.

An index tracking the dollar’s value rose 0.1% to 90.95. So far this year, the dollar was down nearly 6%, on pace for its weakest yearly performance since 2017.

“The monetary and fiscal stimuli we’re seeing is going to reflate the world and that leads to a weaker dollar and should be good for risk and emerging market currencies,” said Axel Merk, president and chief investment officer at Merk Investments, which oversees $1 billion in assets.

Positive vaccine news from Johnson and Johnson and Pfizer Inc on Tuesday supported equities and lifted risk appetite, but the dollar held its own.

German investor sentiment soared more than expected in December on expectations that vaccines against the coronavirus would boost the outlook for Europe’s largest economy.

The ZEW economic research institute said its survey of investors’ economic sentiment moved up to 55.0 from 39.0 in the previous month.

The ECB holds its monetary policy meeting on Thursday.

Investors, meanwhile, continued to focus on Brexit trade deal talks.

With only three weeks to go for Britain to fully complete its exit from the European Union, leaders have failed to narrow differences on a post-Brexit trade deal.

On Wall Street, U.S. stock futures rose slightly in overnight trading on Tuesday, building on recent strength that’s pushed the major averages to record highs.

Dow futures rose 77 points. S&P 500 futures and Nasdaq 100 futures gained 0.19% and 0.16%, respectively.

Fueling the rally is optimism about the U.K.’s rollout of Pfizer’s Covid-19 vaccine on Tuesday. Hope that the Senate will soon agree to a stimulus package to prop up markets as the coronavirus outbreak rages on has also boosted sentiment.

Tuesday afternoon, Senate Majority Leader Mitch McConnell said he wants Congress to pass a coronavirus relief bill with neither legal immunity for businesses nor state and local government relief. Senate Minority Leader Chuck Schumer, D-N.Y., said McConnell’s proposal to move stimulus talks forward without state and local government aid is not in good faith.

The volatile negotiations come amid the worst days of the coronavirus pandemic so far. More than 200,000 Americans are testing positive for the coronavirus every day on average, according to a CNBC analysis of Johns Hopkins University data.

The United States has seen 1 million new cases in just four days, bringing the national total to over 15 million.

Oil moved lower on Tuesday as California tightened its pandemic lockdown through Christmas and COVID-19 cases surged in the United States and Europe, counteracting optimism that arose over vaccine advancements.

Oil prices were briefly buoyed after the world’s first fully-tested COVID-19 vaccine shot was administered to a grandmother in Britain, but investors quickly returned their focus to ebbing fuel demand caused by the pandemic.

U.S. crude oil production is expected to fall by 910,000 bpd in 2020 to 11.34 million bpd, the U.S. Energy Information Administration (EIA) said, a bigger decline than its previous forecast for a drop of 860,000 bpd.

Gold rose to a two-week peak on Tuesday, buoyed by growing expectations of more U.S. fiscal stimulus to combat the economic impact of rising coronavirus cases, while a muted dollar added further support.

China’s consumer price index (CPI) producer price index (PPI) and social financing for November, German unadjusted trade balance for October and US Labor Department’s so-called JOLTs report and inventory data from EIA will be released today.