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Macro Roundup (May 5)
2023-5-5
This is a roundup of global macroeconomic news last night and what is expected today.
The U.S. dollar gained against the euro after the European Central Bank eased its pace of rate hikes, a day after the Federal Reserve hiked rates by 25 basis points and indicated that it may pause further increases.
The greenback also got a boost on Thursday after data showed that U.S. Unit labor costs - the price of labour per single unit of output - surged at a 6.3% rate in the first quarter, after increasing at a 3.3% pace in the fourth quarter.
The euro fell 0.52% to $1.1004. It reached a 13-month high of $1.1096 last week. The dollar also fell 0.33% to 134.18 Japanese yen.
The ECB’s 25-basis-point increase was the smallest since it started lifting them last summer, but the bank also signalled that more tightening would be needed to tame inflation.
Money markets are now pricing in around a 15% chance the Fed will begin cutting rates in June, and expect roughly 80 basis points of rate cuts through to the end of the year.
Stock futures ticked higher Thursday evening. S&P 500 futures inched up by 0.2%, while Nasdaq 100 futures added 0.3%. Futures tied to the Dow Jones Industrial Average gained 21 points, or 0.06%.
Investors received a fresh slate of corporate earnings, including Apple after Thursday’s close. The tech giant posted beats on the top and bottom lines for the fiscal second quarter, propelled by iPhone sales.
During the regular session on Thursday, the three major averages closed lower for the fourth consecutive day. The S&P 500 lost 0.72%, while the Nasdaq Composite dropped 0.49%. The Dow lost 286.50 points, or 0.86%. The 30-stock index also slipped into the red for 2023, down 0.06%. Renewed fears of contagion risk from the embattled regional bank sector drove the selloff and depressed investors’ sentiment.
The averages are also tracking for a week of losses — the worst performance for all three since March 10. The S&P 500 is off 2.6%, while the Nasdaq is off 2.1%. The Dow is down 2.8%.
Investors are nervous about the forward path of the Federal Reserve following policymakers’ 25 basis point rate hike on Wednesday.
Oil prices settled nearly unchanged on Thursday after the European Central Bank (ECB) decided to slow the pace of interest rate hikes, with prices still down more than 9% for the week on demand concerns in major consuming countries.
Brent futures settled up 17 cents, or 0.24%, to $72.50 a barrel. U.S. West Texas Intermediate (WTI) crude settled down 4 cents, or 0.06 to $68.56.
Oil prices tumbled this week after concerns about the U.S. economy and signs of weak manufacturing growth in the world’s largest oil importer China, sliding further after the U.S. Federal Reserve raised interest rates on Wednesday. That capped near-term economic growth prospects.
Gold made another run toward record highs on Thursday as U.S. banking concerns accelerated a flight to the safe-haven asset and sustained its stellar rally driven by bets for a pause in U.S. rate hikes.
Spot gold was up 0.3% at $2,045.79 per ounce after climbing earlier to $2,072.19, shy of a record high of $2,072.49.
European stock markets closed lower on Thursday as investors digested the latest rate hikes by the U.S. Federal Reserve and European Central Bank.
The Stoxx 600 index slightly trimmed earlier losses to end the session down 0.45%. It comes after the ECB confirmed a widely expected 25 basis point interest rate hike at 1:15 p.m. London time.
The U.S. dollar gained against the euro after the European Central Bank eased its pace of rate hikes, a day after the Federal Reserve hiked rates by 25 basis points and indicated that it may pause further increases.
The greenback also got a boost on Thursday after data showed that U.S. Unit labor costs - the price of labour per single unit of output - surged at a 6.3% rate in the first quarter, after increasing at a 3.3% pace in the fourth quarter.
The euro fell 0.52% to $1.1004. It reached a 13-month high of $1.1096 last week. The dollar also fell 0.33% to 134.18 Japanese yen.
The ECB’s 25-basis-point increase was the smallest since it started lifting them last summer, but the bank also signalled that more tightening would be needed to tame inflation.
Money markets are now pricing in around a 15% chance the Fed will begin cutting rates in June, and expect roughly 80 basis points of rate cuts through to the end of the year.
Stock futures ticked higher Thursday evening. S&P 500 futures inched up by 0.2%, while Nasdaq 100 futures added 0.3%. Futures tied to the Dow Jones Industrial Average gained 21 points, or 0.06%.
Investors received a fresh slate of corporate earnings, including Apple after Thursday’s close. The tech giant posted beats on the top and bottom lines for the fiscal second quarter, propelled by iPhone sales.
During the regular session on Thursday, the three major averages closed lower for the fourth consecutive day. The S&P 500 lost 0.72%, while the Nasdaq Composite dropped 0.49%. The Dow lost 286.50 points, or 0.86%. The 30-stock index also slipped into the red for 2023, down 0.06%. Renewed fears of contagion risk from the embattled regional bank sector drove the selloff and depressed investors’ sentiment.
The averages are also tracking for a week of losses — the worst performance for all three since March 10. The S&P 500 is off 2.6%, while the Nasdaq is off 2.1%. The Dow is down 2.8%.
Investors are nervous about the forward path of the Federal Reserve following policymakers’ 25 basis point rate hike on Wednesday.
Oil prices settled nearly unchanged on Thursday after the European Central Bank (ECB) decided to slow the pace of interest rate hikes, with prices still down more than 9% for the week on demand concerns in major consuming countries.
Brent futures settled up 17 cents, or 0.24%, to $72.50 a barrel. U.S. West Texas Intermediate (WTI) crude settled down 4 cents, or 0.06 to $68.56.
Oil prices tumbled this week after concerns about the U.S. economy and signs of weak manufacturing growth in the world’s largest oil importer China, sliding further after the U.S. Federal Reserve raised interest rates on Wednesday. That capped near-term economic growth prospects.
Gold made another run toward record highs on Thursday as U.S. banking concerns accelerated a flight to the safe-haven asset and sustained its stellar rally driven by bets for a pause in U.S. rate hikes.
Spot gold was up 0.3% at $2,045.79 per ounce after climbing earlier to $2,072.19, shy of a record high of $2,072.49.
European stock markets closed lower on Thursday as investors digested the latest rate hikes by the U.S. Federal Reserve and European Central Bank.
The Stoxx 600 index slightly trimmed earlier losses to end the session down 0.45%. It comes after the ECB confirmed a widely expected 25 basis point interest rate hike at 1:15 p.m. London time.
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