Macro Roundup (Feb 15)

SHANGHAI, Feb 15 —This is a roundup of global macroeconomic news last night and what is expected today.

The dollar hit a six-week high against the yen and recovered from a roughly two-week low against a basket of major currencies on Tuesday as data for January showing the smallest annual increase in U.S. consumer prices since October 2021 did not alter market expectations that interest rates will remain elevated for some time.

The greenback initially fell across the board following the inflation report, but regained its footing as U.S. Treasury yields rose as well.

The Labor Department’s Consumer Price Index increased 0.5% last month after gaining 0.1% in December, data showed. Monthly inflation was boosted in part by rising gasoline prices, which increased 3.6% in January.

But in the 12 months through January, the CPI grew 6.4%, the smallest gain in about 1-1/2 years, and followed a 6.5% rise in December. January’s annual CPI rate though was higher than market forecasts for a 6.2% gain.

U.S. stock futures slipped on Tuesday night following the release of January’s hotter-than-anticipated consumer price index.

Dow Jones Industrial Average futures declined by 60 points or 0.18%. S&P 500 and Nasdaq 100 futures fell by 0.24% and 0.28%, respectively.

The Dow fell during the trading session and closed lower by more than 156 points. The S&P 500 remained relatively flat, dropping 0.03%, while the tech-heavy Nasdaq Composite shook off earlier losses to close 0.57% higher.

Oil prices fell about 1% on Tuesday after the United States said it would release more crude from its Strategic Petroleum Reserve, lifting some supply concerns from the market.

On Monday, the U.S. Department of Energy (DOE) said it would sell 26 million barrels of oil from the SPR, which is already at its lowest level since 1983, a release that had been mandated by Congress in previous years.

Brent futures for April delivery fell 96 cents, or 1.1%, to $85.65 a barrel. U.S. West Texas Intermediate crude futures for March fell by 87 cents, or 1.1%, to $79.27 a barrel.

Gold prices gave up gains accrued due to dollar weakness on Tuesday to end the session nearly unchanged as U.S. Federal Reserve officials remained hawkish on rate hikes, while demand concerns sent auto-catalyst palladium sliding to its weakest since August 2019.

Spot gold was nearly flat at $1,852.94 per ounce. U.S. gold futures gained 0.1% to settle at $1,851.80.

European markets ended a choppy session 0.1% higher Tuesday after U.S. inflation grew slightly more than expected, taking the Stoxx 600 to touch a one-year high.

The pan-European index was initially flat following the CPI data release, shedding the morning’s modest gains. But by the late afternoon it had rebounded to trade 0.6% higher before pulling back.