Macro Roundup (May 10)
This is a roundup of global macroeconomic news last night and what is expected today.
The US dollar index hit yet another new four-month high at 93.42 overnight as treasury yields grew. It then came off slightly but remained above 93. It closed at 93.09, up 0.03%.
The two-year treasury yield hit 2.53%, its highest level since September 8, 2008, while the 10-year yield topped 3%, a key psychological level for the benchmark for the first time since late April. The 30-year treasury yield rose to 3.15%.
LME metals rose across the board except for copper and lead. SHFE tin dipped, aluminium closed flat while the rest of SHFE metals inched up.
The US producer price index (PPI) rose 0.1% month on month in April, lower than the expected 0.2% and March’s 0.3%. This equates to a year-on-year increase of 2.6%, also lower than the expected 2.8% and March’s 3%.
The core PPI in April grew 0.2% on the month, in line with forecast and below the 0.3% seen in March. It grew 2.3% on the year, compared to the expected 2.4% and the previous month’s 2.7%.
The gauge that excludes food, energy and trade services nudged up 0.1% month on month in April and 2.5% year on year.
The lower-than-expected increase in PPI could ease fears that inflation pressures were rapidly building up.
The revised US wholesale inventories for March came in at a 0.3% month-on-month growth, lower than the expected and previously reported 0.5% as wholesale auto inventories fell and as inventories of professional equipment, drugs, apparel and groceries also decreased.
Inventories of US crude oil during the week ended May 4 unexpectedly fell by 2.2 million barrels, according to data from the Energy Information Administration (EIA). Gasoline inventories also fell 2.17 million barrels and refined oil inventories shrank by 3.79 million barrels.
Key factors to watch today include China’s consumer price index (CPI) and PPI in April, the US CPI in April as well as the US jobless claims over the week ended May 5.
The US dollar is likely to remain rangebound around 93 in the short term while base metals are expected to continue their rangebound patterns.