Macro Roundup (Jul 12)
This is a roundup of global macroeconomic news last night and what is expected today.
The US dollar index gained 0.66% to close at 94.72 as its inflation data came in stronger than expected. Market anxiety continued to ramp up after the Trump administration started the process of imposing tariffs on a further $200 billion of imports from China.
LME base metals dipped across the board with lead leading the losses and closing nearly 5% lower. Copper fell over 3%, zinc and tin lost over 2%, while nickel and aluminium dropped over 1%. Copper, zinc, and lead touched the lowest levels over a year. SHFE base metals mostly ceased their downward trends, as nickel rebounded over 1%. Aluminium gained nearly 1%, and tin inched up. Zinc, lead, and copper closed slightly lower.
The US producers price index (PPI) in June gained 0.3% from May, and rose 3.4% from a year ago. The figure increased slightly more than expected amid gains in the cost of services and motor vehicles, leading to the biggest annual increase in six and a half years.
June's core PPI, a key gauge of underlying producer price pressures that excludes food, energy and trade services rose 0.3% month on month, and went up 2.7% year on year. Inflation is gradually growing against the backdrop of a labour market close to or at full employment.
Sales at US wholesalers rose 2.5% month on month in May, the biggest increase since March 2011, after rising 1.4% in April. The US wholesale inventories were a bit higher than estimated in May amid strong increases in the stocks of machinery and a range of other goods.
At May's sales pace it would take wholesalers 1.24 months to clear shelves, down from 1.27 months in April. This marks the lowest level since November 2014.
Data from the Energy Information Administration (EIA) showed that US crude oil inventory shrank 12.63 million barrels over the week ended July 6, the largest weekly decline since September 2016, after rising 1.25 million barrels in the previous week. Meanwhile, refined oil inventory increased 4.13 million barrels, and gasoline stock went down 694,000 barrels over the week.
Inventory data stimulated oil prices to jump, but worries over intensified trade war dragged down the price on Wednesday.
The US consumer price index (CPI) in June and its weekly initial claims for unemployment benefits are the key factors to watch today.