• 08/08/2022 10:25 pm

SHANGHAI, Aug 18 (SMM) — This is a roundup of global macroeconomic news last night and what is expected today.

 

Nonferrous metals on both LME and SHFE rose for the most part on Monday, and the US dollar index, which measures the greenback against a basket of currencies, extended declines on strengthened risk appetite. 

 

US dollar fell for four straight trading days, and recorded a new low since August 7 of 92.76 on Monday as weak results from a regional manufacturing survey added to doubts sowed by grim data last week that the US recovery is on shaky grounds.

The New York Fed’s Empire State business conditions index fell to 3.7 in August versus 17.2 in July. The reading indicates a slowdown in the manufacturing sector though the results were partially offset by strong housing data released earlier on Monday. US homebuilder confidence rose for a third straight month in August to match a record high as record-low interest rates spur a surge in customer traffic, especially in suburban markets that are growing in appeal as a result of the coronavirus pandemic.

 

Gold jumped over 2% to its highest in nearly a week on Monday as a weaker dollar, a pull-back in US Treasury yields along with Warren Buffett’s Berkshire Hathaway buying a stake in major gold miner bolstered investor morale.

Spot gold climbed 1.9% to $1,981.41 an ounce and US gold futures settled up 2.5% at $1,998.70.

A regulatory filing on Friday disclosed Berkshire Hathaway’s new 20.9 million share investment in one of the world’s largest mining companies, Barrick Gold Corp.

 

Oil prices rose on Monday, as OPEC+ producers almost fully complied in July with their global production cut accord, and after US officials said China is in compliance with the first phase of the two nations’ trade deal.

Brent crude rose 57 cents, or 1.3%, to $45.37 a barrel, and West Texas Intermediate crude settled 88 cents, or 2.09%, higher at $42.89 per barrel.

Compliance with OPEC+ oil output cuts is seen at around 97% in July. The oil-producing nations have been cutting output by record levels to curb supply and reduce worldwide inventories. In August, OPEC+ eased its agreed cuts to 7.7 million barrels per day (bpd) from 9.7 million bpd previously. Later-dated Brent futures contracts suggest that traders see inventories remaining high in coming months due to weakened demand.

China is living up to its end of the trade deal the two parties signed in January, US President Donald Trump said Monday. Chinese state-owned oil firms have tentatively booked tankers to transport at least 20 million barrels of US crude for August and September.

 

On Wall Street, stocks closed mixed on Monday. The S&P 500 closed Monday’s session up 0.3%, just shy of its record closing high of 3,386.15 from February 19. The broad equity gauge has been flirting with its all-time high since last week. The Nasdaq Composite gained 1% to end its trading day at 11,129.73, hitting an all-time high. The Dow Jones Industrial Average lagged, falling 85 points, or about 0.3%, to close at 27,844.91.

The market has been stuck in a tight range as hopes for a new coronavirus stimulus deal dimmed with lawmakers unwilling to break a stalemate. Democrats and Republicans are holding their respective presidential nominating conventions this week and next.

Meanwhile, tensions between the US and China still kept investors on edge. The Trump administration announced on Monday it will further tighten restrictions on Huawei, aimed at cracking down on the Chinese telecom giant access to commercially available chips.

 

Shanghai base metals, except for tin, moved higher on overnight trading. Copper rose 1.27%, aluminium added 0.42%, zinc jumped 2.13%, lead advanced 0.37% and nickel increased 1.12%, while tin weakened 0.18%.

Their counterparts on the LME performed similarly. Copper increased 1.31%, aluminium strengthened 0.92%, zinc soared 3.38%, lead added 0.77% and nickel rose 1.77%, while tin fell 0.91%.

 

Economic data slated for release today include US building permits and new home starts for July and commercial retail sales in the week ended August 15.

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