Macro Roundup (Jan 14)

SHANGHAI, Jan 14 (SMM) — This is a roundup of global macroeconomic news last night and what is expected today.

The US dollar advanced across the board on Wednesday, shaking off the weakness of the previous session, as it continued its recent rebound from last week's near three-year low.

A rise in U.S. Treasury yields, driven by expectations of higher government spending under the Joe Biden administration, has helped boost the battered dollar in recent sessions.

The greenback has also found support from expectations of a continued economic recovery in the United States, even as countries in Europe resort to lockdowns to fend off a second COVID-19 wave.

“You are seeing a continuance of the U.S. outperformance trade,” Karl Schamotta, chief market strategist at Cambridge Global Payments in Toronto.

US Treasury yields retreated a little on Wednesday after Federal Reserve officials pushed back against tighter monetary conditions anytime soon, even with the prospect of higher inflation ahead.

On Wall Street, US stock futures rose on Wednesday night as traders kept an eye on interest rates and lingering turmoil in Washington.

Dow Jones Industrial Average futures traded 46 points higher, or 0.1%. S&P 500 futures gained 0.2%, and Nasdaq 100 futures advanced 0.1%.

Earlier in the day, the S&P 500 and Nasdaq Composite gained 0.2% and 0.4%, respectively. The Dow, meanwhile, closed flat.

Wednesday's gains for the S&P 500 and Nasdaq came after Intel rallied nearly 7% to lead tech stocks higher. They also followed U.S. interest rates easing from their highest levels since March 2020.

The benchmark 10-year note yield slipped to 1.09% a day after hitting a high of 1.18%. That decline in rates came as two key Federal Reserve officials noted that monetary policy will remain easy for the foreseeable future.

Oil prices were little changed on Wednesday, supported by a bigger-than-expected drop in U.S. crude inventories but under pressure as rising global COVID-19 cases threatened global fuel demand.

Brent crude prices were down 53 cents at $56.05 a barrel. An earlier rise took prices as high as $57.42 a barrel, the strongest since Feb. 24.

U.S. West Texas Intermediate (WTI) settled 30 cents, or 0.6%, lower at $52.91 per barrel.

U.S. crude inventories fell by 3.2 million barrels in the week to Jan. 8 to 482.2 million barrels, exceeding analysts' expectations in a poll for a 2.3 million-barrel drop, as refiners increased crude runs, the Energy Information Administration said.

Gold prices held steady on Wednesday, underpinned by data showing a rise in consumer prices in the United States and expectations that more fiscal stimulus from a Joe Biden administration could trigger higher inflation.

Spot gold was little changed at $1,854.84 an ounce. U.S. gold futures settled up 0.6% at $1,854.90.

Bob Haberkorn, senior market strategist at RJO Futures, said expectations for more stimulus, higher-than-expected inflation and safe-haven buying driven by the political environment in the United States were keeping gold supported.

The Labor Department on Wednesday said its consumer price index increased 0.4% last month after gaining 0.2% in November.

“It shows that there's a slight uptick in inflation, which is always supportive of gold,” Haberkorn said.

Key economic data slated for release today include China's trade data for December, monthly rate of US import price index and US Initial Jobless Claims.