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Macro Roundup (May 4)
2023-5-4
This is a roundup of global macroeconomic news last night and what is expected today.
The U.S. dollar fell on Wednesday after the Federal Reserve raised interest rates by a quarter of a percentage point and signalled it may pause further increases.
The pause would give officials time to assess the fallout from recent bank failures, wait on the resolution of a political standoff over the U.S. debt ceiling, and monitor the course of inflation.
The Fed did not explicitly commit to ending its hiking cycle, helping to lift the dollar off session lows reached immediately after the central bank released its meeting statement.
The dollar briefly bounced after data earlier on Wednesday showed U.S. private employers boosted hiring in April with strong demand in the leisure and hospitality industry, though wage growth slowed.
Other data on Wednesday showed the U.S. services sector maintained steady growth in April as new orders increased amid a surge in exports, but businesses continued to face higher prices for inputs, indicating that inflation could remain elevated.
Consumer price inflation due next week will also offer fresh clues on whether inflation is continuing to ease.
S&P 500 futures fell after the Federal Reserve hiked rates by another 25 basis points and investors’ fears of contagion in the regional bank space returned.
Futures linked to the broad-market index slipped 0.2%. Futures linked to the Dow Jones Industrial Average dropped 88 points, or 0.2%. Nasdaq 100 futures traded near the flat line, up 0.06%.
Stocks closed lower in Wednesday’s regular session, with the Dow shedding 270 points, or 0.8%, and the S&P 500 dropping 0.7%. The Nasdaq Composite lost roughly 0.5%.
Looming ahead are key economic reports that will inform the Fed’s next steps. Initial jobless claims are due Thursday. Friday’s main event will be April’s payrolls report, which economists polled by Dow Jones predict will rise by 180,000.
Oil prices fell 4% on Wednesday, extending steep losses from the previous session after the U.S. Federal Reserve raised interest rates and as investors fretted about the economy.
Brent futures settled $2.99 lower, or 4%, to $72.33 a barrel, the global benchmark’s lowest close since December 2021. Brent hit a session low of $71.70 a barrel, its lowest since March 20.
Gold firmed on Wednesday as the U.S. Federal Reserve delivered a widely expected rate hike and signalled a pause in further increases.
Spot gold was last 1.13% higher at $2,039.0168 per ounce after touching its highest since April 14 at $2,036.15 earlier.
European markets closed higher on Wednesday as global investors brace themselves for the U.S. Federal Reserve’s latest monetary policy decision.
The pan-European Stoxx 600 index provisionally ended up 0.3%, slightly trimming earlier gains. The benchmark index fell 1.2% yesterday to its lowest level in nearly a month, according to Reuters data.
The U.S. dollar fell on Wednesday after the Federal Reserve raised interest rates by a quarter of a percentage point and signalled it may pause further increases.
The pause would give officials time to assess the fallout from recent bank failures, wait on the resolution of a political standoff over the U.S. debt ceiling, and monitor the course of inflation.
The Fed did not explicitly commit to ending its hiking cycle, helping to lift the dollar off session lows reached immediately after the central bank released its meeting statement.
The dollar briefly bounced after data earlier on Wednesday showed U.S. private employers boosted hiring in April with strong demand in the leisure and hospitality industry, though wage growth slowed.
Other data on Wednesday showed the U.S. services sector maintained steady growth in April as new orders increased amid a surge in exports, but businesses continued to face higher prices for inputs, indicating that inflation could remain elevated.
Consumer price inflation due next week will also offer fresh clues on whether inflation is continuing to ease.
S&P 500 futures fell after the Federal Reserve hiked rates by another 25 basis points and investors’ fears of contagion in the regional bank space returned.
Futures linked to the broad-market index slipped 0.2%. Futures linked to the Dow Jones Industrial Average dropped 88 points, or 0.2%. Nasdaq 100 futures traded near the flat line, up 0.06%.
Stocks closed lower in Wednesday’s regular session, with the Dow shedding 270 points, or 0.8%, and the S&P 500 dropping 0.7%. The Nasdaq Composite lost roughly 0.5%.
Looming ahead are key economic reports that will inform the Fed’s next steps. Initial jobless claims are due Thursday. Friday’s main event will be April’s payrolls report, which economists polled by Dow Jones predict will rise by 180,000.
Oil prices fell 4% on Wednesday, extending steep losses from the previous session after the U.S. Federal Reserve raised interest rates and as investors fretted about the economy.
Brent futures settled $2.99 lower, or 4%, to $72.33 a barrel, the global benchmark’s lowest close since December 2021. Brent hit a session low of $71.70 a barrel, its lowest since March 20.
Gold firmed on Wednesday as the U.S. Federal Reserve delivered a widely expected rate hike and signalled a pause in further increases.
Spot gold was last 1.13% higher at $2,039.0168 per ounce after touching its highest since April 14 at $2,036.15 earlier.
European markets closed higher on Wednesday as global investors brace themselves for the U.S. Federal Reserve’s latest monetary policy decision.
The pan-European Stoxx 600 index provisionally ended up 0.3%, slightly trimming earlier gains. The benchmark index fell 1.2% yesterday to its lowest level in nearly a month, according to Reuters data.
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