Macro Roundup (Sep 15)

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

The dollar fell 1% against the yen right after news of the rate check. Nikkei website reported the rate check, citing unidentified sources, and Reuters later confirmed it with a market source. The dollar was last down 0.94% at 143.19 yen, hitting a session low of 142.6 in the wake of the PPI data.

The dollar index, which tracks the currency against six main peers, was down 0.3% on Wednesday at 109.55, a day after registering its largest daily percentage gain since March 2020 on an unexpected rise in the U.S. consumer price index (CPI).

On Wednesday, data showed producer prices fell for second straight month in August, while it also showed underlying producer inflation rising moderately last month.

Financial markets now have fully priced in an interest rate hike of at least 75 basis points at the conclusion of the Fed’s policy meeting next week, according to the CME’s Fedwatch tool.

U.S. equity futures were slightly higher Wednesday evening as investors looked ahead to several economic reports scheduled to come out in the morning.

Futures tied to the Dow Jones Industrial Average inched higher by 17 points, or 0.05%. S&P 500 futures added 0.22%, and Nasdaq 100 futures advanced 0.12%.

Earlier in the day, the major averages ended a choppy session on a modestly higher note. The Dow closed slightly higher, by 30 points, after falling more than 200 points at one point. The S&P 500 rose 0.3%, and the Nasdaq Composite advanced 0.7%.

Stocks sought stability after a hotter-than-expected inflation report on Tuesday sent them tumbling to post their worst day since 2020. August's consumer price index report showed headline inflation rose 0.1% on a monthly basis, despite a drop in gas prices.

Oil rose about 2% on Wednesday, rebounding from the previous day’s lows, as an international energy watchdog expects an increase in gas-to-oil switching due to high prices this winter, even though the outlook for demand remains gloomy.

Brent crude futures rose by $1.61 a barrel, or 1.8%, to $94.78. U.S. West Texas Intermediate crude gained $1.89, or 2.1%, to $89.20.

The International Energy Agency (IEA) expects the deepening economic slowdown and a faltering Chinese economy to cause global oil demand to grind to a halt in the fourth quarter of the year.

Gold prices slipped below the key $1,700 per ounce level on Wednesday, as expectations for steep rate hikes from the U.S. Federal Reserve took some sheen off the non-yielding precious metal.

Spot gold fell 0.36% to $1,695.47 per ounce, after marking its biggest one-day percentage decline since July 14 on Tuesday, driven by the dollar’s rally following a surprise rise in U.S. inflation.

The pan-European Stoxx 600 provisionally ended down 0.8%, with almost all sectors and all major bourses sliding into negative territory. Mining stocks led the losses, down 2.3%, while oil and gas stocks bucked the downward trend, up 0.8%.