Macro Roundup (Jun 25)

SHANGHAI, Jun 25 (SMM) —This is a roundup of global macroeconomic news last night and what is expected today.

The dollar was steady on Thursday as investors evaluated the likelihood that the US Federal Reserve will be more aggressive in stamping out high inflation if it persists, while the pound weakened after the Bank of England made no changes to its monetary policy.

Fed policymakers have been offering differing viewpoints on how long inflation is likely to stay high and when it will be appropriate to tighten monetary policy after the Fed last week surprised markets by forecasting two rate hikes in 2023.

The dollar index was little changed on the day against a basket of currencies at 91.790, holding below a two-month high of 92.408 reached on Friday after the Fed meeting.

On Thursday, two Fed officials warned that inflation could rise more than policymakers expect in the near term. Other US central bank policymakers said employment needs much more improvement after job losses during the pandemic.

On Wall Street, US stock futures rose in overnight trading on Thursday after the S&P 500 closed at a record.

Dow futures rose about 100 points. S&P 500 futures gained 0.1%, and Nasdaq 100 futures were flat.

Nike’s stock rose nearly 5% in extended trading after the company reported earnings of 93 cents per share, outpacing a Refinitiv estimate by 42 cents per share. Revenue came in at $12.34 billion, topping a forecast of $11.01 billion. Digital sales were up 41% since last year and 147% from two years ago. FedEx dipped 4% despite beating on the top and bottom lines of its earnings. FedEx also gave a strong yearly outlook.

Shares of the major US bank popped after the Federal Reserve announced the banks could easily withstand a severe recession. The Fed, in releasing the results of its annual stress test, said the 23 institutions in the 2021 exam remained “well above” minimum required capital levels during a hypothetical economic downturn. Bank of America and Wells Fargo rose 1.8% and 2.7%, respectively.

Oil prices reversed losses on Thursday to move higher, holding close to their highest in almost three years, supported by drawdowns in US inventories and accelerating German economic activity.

Doubts about the future of the 2015 Iran nuclear deal that could end US sanctions on Iranian crude exports also helped prices.

Brent advanced 0.49% to settle at $75.56 per barrel. US crude gained 0.3% to settle at $73.30 per barrel, after hitting a session high of $73.61 earlier.

Both benchmarks had hit their highest since October 2018 on Wednesday before slightly paring back gains.

Gold edged lower in choppy trading on Thursday, as mixed cues from US Federal Reserve officials on the approach the central bank could take to withdraw stimulus kept investors wary.

Spot gold fell 0.1% to $1,776.65 per ounce by 2:15 p.m. EDT (1815 GMT), reversing some gains from earlier in the session as the dollar recouped initial declines.

US gold futures settled 0.4% lower at $1,776.70.

The pan-European Stoxx 600 ended the session up by 0.9%, with travel and leisure shares climbing 1.8% to lead gains, while telecoms bucked the upward trend to slide 0.1% lower.

In the U.K., the FTSE 100 rose after the Bank of England kept its monetary policy unchanged but vowed to monitor rising inflation. The index added to earlier gains and was trading around 0.5% by the close. The British pound was down about 0.4% versus the dollar.

British food delivery firm Deliveroo was another top performer, rising 9% after a U.K. court ruled that its couriers are self-employed.