Macro Roundup (Sep 18)

SHANGHAI, Sep 18 (SMM) — This is a roundup of global macroeconomic news last night and what is expected today.

The dollar held near three-week highs on Friday after better-than-expected retail sales numbers in the United States boosted bets on the strength of the US economy and earlier monetary policy tightening.

The euro pulled itself into positive territory by the European mid-morning but at $1.1783 remained close to a three-week low.

US retail sales unexpectedly increased in August, data showed on Thursday, rising 0.7% from the previous month despite expectations of a 0.8% fall. A business sentiment survey also showed a big improvement.

The figures revive expectations for an early tapering of its asset purchases by the Federal Reserve, which has its two-day policy meeting next week.

The more bullish reading of the US economic outlook faces another test on Friday with the release of the University of Michigan’s consumer sentiment index.

The dollar index last stood at 92.818 down slightly on the session but near Thursday’s three-week high of 92.965.

Currency markets were generally quiet on Friday with traders reluctant to take on new positions ahead of a clutch of important central bank meetings next week including the Fed, the Bank of Japan and the Bank of England.

On Wall Street, stocks dipped on Friday as investors remain cautious due to a resurgent Covid virus, a Federal Reserve meeting next week and a historical tendency for September to be a weak month for equities.

The Dow Jones Industrial Average lost 166.44 points or 0.5% to close at 34,584.88, dragged down by a nearly 2.9% drop in Dow Inc. The S&P 500 shed 0.9% to 4,432.99 and the Nasdaq Composite lost 0.9% to close at 15,043.97.

Mega-cap technology stocks were mostly in the red, with social media giant Facebook dropping 2.2% and Alphabet falling just shy of 2%. Apple lost 1.8%, and Microsoft slipped 1.7%.

The Food and Drug Administration advisory committee on Friday rejected a plan to administer booster shots of Pfizer and BioNTech’s Covid-19 vaccine to the general public. Pfizer fell 1.3% and BioNTech dropped 3.6%. Moderna lost 2.4%.

Oil prices fell on Friday as energy companies in the US Gulf of Mexico restarted production after back-to-back hurricanes in the region shut output.

Brent crude futures fell 33 cents to settle at $75.34 a barrel. US West Texas Intermediate (WTI) crude futures fell 64 cents to settle at $71.97 a barrel. For the week, Brent was up 3.3% and US crude was up 3.2%, supported by tight supplies due to the hurricane outages.

Gold regained some ground on Friday after a drop of nearly 3% in the last session, but a firm dollar kept bullion on course for a weekly decline with the focus still on an upcoming US Federal Reserve meeting.

Spot gold rose 0.7% to $1,765.73 per ounce by 0925 GMT, while US gold futures gained 0.6% to $1,766.30.

Bullion slipped nearly 3% on Thursday after an unexpected increase in US retail sales raised expectations that the Fed may reduce its stimulus sooner, which also drove a rally in the dollar.

The benchmark Hang Seng index in Hong Kong closed 1.03% higher at 24,920.76, recovering partially from heavy losses earlier in the week. Still, the index declined nearly 5% for the week amid regulatory concerns surrounding sectors such as technology and casinos.

The pan-European Stoxx 600 closed down by nearly 1%, having earlier been up by as much as 0.7%. Travel and leisure stocks added 1.1% to lead gains while basic resources fell 4%. The Stoxx 600 also saw a weekly decline of 1%, down for the third straight week.

Shares in Asia-Pacific were mixed on Friday after taking losses for much of the week as concerns about China’s regulatory crackdown and slowing global growth weighed on risk sentiment. China Evergrande Group shares continued to plummet amid fears over its debt problems.