Macro Roundup (Apr 28)

SHANGHAI, Apr 28 —This is a roundup of global macroeconomic news last night and what is expected today.

The euro tumbled against the U.S. dollar Wednesday as investors grew increasingly concerned with energy supply and a potential recession in the region.

The euro dipped below $1.06 for the first time since 2017. It slid 0.8% lower to $1.056. The dollar has surged in recent weeks on its safe-haven appeal, as traders fear a growth slowdown or even a recession.

Stock futures rose in overnight trading as the market shook off the April sell-off and investors reacted positively to earnings from Meta Platforms.

Futures on the Dow Jones Industrial Average added 70 points or 0.2%. S&P 500 futures gained 0.7% and Nasdaq 100 futures jumped 1.2%.

The moves came as shares of Meta surged more than 18% after hours following a beat on earnings but a miss on revenue, a sign that investors may see signs of relief in the beaten-up tech sector. Shares were down 48% on the year heading into the results.

Meanwhile, shares of Qualcomm gained 5.6% in extended trading on the back of strong earnings while PayPal rose 5% despite issuing weak guidance for the second quarter.

Oil prices saw modest gains on Wednesday despite a soaring U.S. dollar, which makes barrels more expensive and coronavirus outbreaks in China clouded the economic outlook in the world’s biggest importer of crude oil.

Supplies remained tight in the world’s largest oil producer, the United States, as government data showed crude stockpiles rose modestly last week as fuel inventories declined.

Brent crude futures added 33 cents to end the day at $105.32 per barrel. U.S. West Texas Intermediate crude futures settled 0.3% higher at $102.02 per barrel.

The dollar rose to its highest in five years, making oil purchases more expensive for holders of other currencies.

Gold slipped to a more than two-month trough on Wednesday as the dollar rallied on expectations of aggressive monetary policy tightening by the U.S. Federal Reserve.

Spot gold dropped 1.1% to $1,884.74 per ounce, after dropping to $1,881.45, its lowest level since Feb. 24. U.S. gold futures settled down 1% at $1,885.7.

The dollar index charged to its highest level since January 2017, fueled by expectations that the U.S. central bank will be more hawkish than peers and safe-haven flows fanned by concerns over slowing growth in China and Europe.

The Fed is expected to increase rates by 50 basis points at its May 3-4 meeting.

Rising U.S. interest rates increase the opportunity cost of holding non-yielding gold, while also boosting the dollar, in which it is priced. The greenback is also seen as a rival safe-haven asset to gold during economic and political crises.

European stocks closed higher Wednesday despite fears of a slowdown in global economic growth, as traders digested a deluge of earnings.

The pan-European Stoxx 600 index closed up by 0.6% provisionally with nearly all sectors and major bourses in positive territory.

Investors are also watching the halting of Russian gas supplies to Poland and Bulgaria closely after Gazprom told both countries that it was halting supplies because they had refused to pay for the gas in rubles, as Moscow demanded recently. The move pushed European gas prices higher and the euro lower.