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Macro Roundup (May 17)

iconMay 17, 2021 08:52
Source:SMM
The U.S. dollar edged lower against major currencies on Friday as risk appetite recovered across markets, after Federal Reserve officials helped calm concerns about a quick tightening of policy in response to accelerating U.S. inflation.

SHANGHAI, May 17 (SMM) — This is a roundup of global macroeconomic news last night and what is expected today.

The U.S. dollar edged lower against major currencies on Friday as risk appetite recovered across markets, after Federal Reserve officials helped calm concerns about a quick tightening of policy in response to accelerating U.S. inflation.

The greenback, seen as a safe haven in times of market volatility, was down a third of a percent against a basket of currencies, retracing some of its earlier gains on Wednesday after data showed a surprise surge in consumer prices.

U.S. consumer prices increased by the most in nearly 12 years in April on booming demand.

Federal Reserve officials have played down expectations of tighter policy, stressing price rises from the reopening of the economy should be temporary.

Wall Street came off one of the wildest weeks of 2021 that saw the S&P 500 fall 4% through midweek amid heightened inflation fears. The broad equity benchmark eventually ended the week down 1.4% after a back-to-back rally. The tech-heavy Nasdaq Composite, which got hit particularly hard by higher price pressures, dropped 2.3% last week. The blue-chip Dow fell 1.1% in that period. All three benchmarks posted their worst week since February 26.

Oil prices rose on Friday, reversing some of the previous day’s sharp losses as stock markets strengthened and the U.S. dollar slipped, though gains were capped by the coronavirus situation in major oil consumer India.

Colonial Pipeline said late on Thursday it had restarted its entire pipeline system and had begun deliveries in all its markets. The line is the major conduit from Gulf refineries to the U.S. East Coast.

Gold extended its gains on Friday, buoyed by a dip in the dollar and U.S. Treasury yields after data showed U.S. retail sales unexpectedly stalled in April.

Spot gold was up 0.7% at $1,838.57 per ounce by 12:49 p.m. (1649 GMT), heading for a second week of gains. U.S. gold futures climbed 0.8% to $1,837.80.

U.S. retail sales unexpectedly stalled in April as the boost from stimulus checks faded, but an acceleration is likely in the coming months amid record savings and a reopening economy.

The Commerce Department said on Friday the unchanged reading in retail sales last month followed a 10.7% surge in March, an upward revision from the previously reported 9.7% increase.

U.K. Prime Minister Boris Johnson has said his government is concerned about the increased transmissibility of the new Covid-19 variant first detected in India, and indicated that nothing can be ruled out in potential efforts to curtail it.

Looking ahead, a slew of Chinese economic data, including the country’s industrial production and retail sales for April, is expected to be out at 10:00 a.m. HK/SIN on Monday.

Macroeconomics

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