Macro Roundup (Apr 20)

SHANGHAI, Apr 20 - This is a roundup of global macroeconomic news last night and what is expected today.

The U.S. dollar strengthened on Wednesday, lifted by rising Treasury yields, though the pound gained against the greenback after British inflation stayed above 10% in March and put more pressure on the Bank of England to keep raising rates.

Sterling was last trading at $1.244, up 0.13% on the day, while the dollar rose 0.46% against the rate-sensitive yen at 134.71, after briefly poking above 135 for the first time in a month.

The dollar index, which tracks the currency against a basket of its peers, was up 0.206% as markets turn more sceptical that the Federal Reserve will cut rates later this year.

Futures pricing shows an 85.7% chance the Fed will hike rates 25 basis points when policymakers conclude a two-day meeting on May 3, according to CME’s FedWatch Tool. But the likelihood of a rate cut by December has narrowed considerably this week.

Stock futures are modestly lower Wednesday night as investors appraised the latest batch of corporate earnings.

Futures tied to the Dow Jones Industrial Average lost 43 points or 0.1%. S&P 500 futures shed 0.2%, while Nasdaq-100 futures slipped 0.3%.

The S&P 500 finished Wednesday’s session slightly below its flatline as investors digested the latest batch of earnings, including Netflix and Morgan Stanley, which are both members of the broad index. Though investor focus has largely moved to these quarterly results, the reporting companies alone have not driven the broader market

Beyond earnings, investors will keep an eye on morning data on jobless claims and existing home sales.

Oil prices slid about 2% to a two-week low on Wednesday despite a sharp decline in U.S. crude inventories, as the dollar strengthened on fears that looming Federal Reserve interest rate hikes could curb energy demand in the world’s top consumer.

Brent futures for June delivery fell $1.65, or 2.0%, to settle at $83.12 a barrel.

Gold prices fell below the key $2,000 level on Wednesday as U.S. yields marched higher, with investors turning more sceptical over potential U.S. rate cuts later this year.

Spot gold was down 0.45% at $1,995.91 per ounce. U.S. gold futures fell 0.55% to $2,008.50.

European stock markets closed lower Wednesday as investors digest inflation data and mixed signals from U.S. Federal Reserve officials on the trajectory of interest rate hikes.

The pan-European Stoxx 600 index closed 0.1% lower, with mining stocks down 1.3% after recent gains on Chinese economic data. Tech stocks made the biggest losses, down 1.9%, while insurance led gains with a 1.1% uptick.