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Macro Roundup (May 11)
2023-5-11
This is a roundup of global macroeconomic news last night and what is expected today.
The U.S. dollar fell against other major currencies on Wednesday on news that U.S. inflation slowed more than expected, increasing the likelihood that the Federal Reserve could pause its interest rate hikes.
The Japanese yen was last seen at $134.34 as the dollar slipped 0.64%.
U.S. Labour Department data showed April inflation cooled to 4.9%, the smallest year-over-year increase in two years. However, so-called core inflation remained sticky at 5.5%, suggesting interest rates may need to stay high for some time to tame it.
Economists polled by Reuters expected core U.S. consumer prices to rise 5.5% on a year-on-year basis for April.
A stronger-than-expected reading would have proved a headache for the Fed, which signalled last week it was open to pausing its aggressive tightening cycle after delivering 10 consecutive rate hikes since March 2022.
U.S. stock futures remained relatively flat on Wednesday night after Disney posted its latest quarterly results and investors look toward Thursday’s Producer Price Index report.
Dow Jones Industrial Average futures fell by 6 points, or 0.02%. S&P 500 futures rose 0.07%, while Nasdaq-100 futures ticked up 0.02%.
Market reactions were relatively muted during Wednesday’s main trading session. The tech-heavy Nasdaq Composite gained 1.04%, closing at 12,306.44. The S&P 500 inched up 0.45% to 4,137.64. Meanwhile, the Dow Jones Industrial Average ticked down 0.09% to end at 33,531,33.
Wall Street will also be keeping an eye on more economic data coming out. The weekly jobless claims numbers from the prior week will be announced, as well as the data from April’s Producer Price Index, which measures price changes in goods used by producers.
Oil prices fell by more than a dollar a barrel on Wednesday, ending a three-day rally, as economic data suggested that the U.S. Federal Reserve might hike interest rates further.
Brent crude dropped $1.03, or 1.3%, to settle at $76.41 a barrel while U.S. West Texas Intermediate crude (WTI) fell $1.15, or 1.6%, to $72.56 a barrel.
U.S. consumer prices rose in April, potentially raising the likelihood that the Fed will maintain higher interest rates for the time being. Rising global interest rates have weighed on oil prices in recent months, as traders are concerned about the economy crashing into a recession.
Gold prices edged lower on Wednesday as optimism over the Federal Reserve cutting interest rates this year faded after U.S. inflation report, triggering profit-taking among some investors.
Spot gold was last down 0.19% to $2,030.59 per ounce and U.S. gold futures settled 0.3% lower at $2,037.10.
European markets closed lower on Wednesday as investors digested the latest U.S. inflation data and how it could affect the U.S. Federal Reserve’s monetary policy.
The pan-European Stoxx 600 index provisionally ended down 0.5%, with major bourses and most sectors in negative territory. Food and beverages stocks led the losses, down 1.4%.
The U.S. dollar fell against other major currencies on Wednesday on news that U.S. inflation slowed more than expected, increasing the likelihood that the Federal Reserve could pause its interest rate hikes.
The Japanese yen was last seen at $134.34 as the dollar slipped 0.64%.
U.S. Labour Department data showed April inflation cooled to 4.9%, the smallest year-over-year increase in two years. However, so-called core inflation remained sticky at 5.5%, suggesting interest rates may need to stay high for some time to tame it.
Economists polled by Reuters expected core U.S. consumer prices to rise 5.5% on a year-on-year basis for April.
A stronger-than-expected reading would have proved a headache for the Fed, which signalled last week it was open to pausing its aggressive tightening cycle after delivering 10 consecutive rate hikes since March 2022.
U.S. stock futures remained relatively flat on Wednesday night after Disney posted its latest quarterly results and investors look toward Thursday’s Producer Price Index report.
Dow Jones Industrial Average futures fell by 6 points, or 0.02%. S&P 500 futures rose 0.07%, while Nasdaq-100 futures ticked up 0.02%.
Market reactions were relatively muted during Wednesday’s main trading session. The tech-heavy Nasdaq Composite gained 1.04%, closing at 12,306.44. The S&P 500 inched up 0.45% to 4,137.64. Meanwhile, the Dow Jones Industrial Average ticked down 0.09% to end at 33,531,33.
Wall Street will also be keeping an eye on more economic data coming out. The weekly jobless claims numbers from the prior week will be announced, as well as the data from April’s Producer Price Index, which measures price changes in goods used by producers.
Oil prices fell by more than a dollar a barrel on Wednesday, ending a three-day rally, as economic data suggested that the U.S. Federal Reserve might hike interest rates further.
Brent crude dropped $1.03, or 1.3%, to settle at $76.41 a barrel while U.S. West Texas Intermediate crude (WTI) fell $1.15, or 1.6%, to $72.56 a barrel.
U.S. consumer prices rose in April, potentially raising the likelihood that the Fed will maintain higher interest rates for the time being. Rising global interest rates have weighed on oil prices in recent months, as traders are concerned about the economy crashing into a recession.
Gold prices edged lower on Wednesday as optimism over the Federal Reserve cutting interest rates this year faded after U.S. inflation report, triggering profit-taking among some investors.
Spot gold was last down 0.19% to $2,030.59 per ounce and U.S. gold futures settled 0.3% lower at $2,037.10.
European markets closed lower on Wednesday as investors digested the latest U.S. inflation data and how it could affect the U.S. Federal Reserve’s monetary policy.
The pan-European Stoxx 600 index provisionally ended down 0.5%, with major bourses and most sectors in negative territory. Food and beverages stocks led the losses, down 1.4%.
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