SHANGHAI, Mar 8 —This is a roundup of global macroeconomic news last night and what is expected today.
The U.S. dollar hit a three-month high against a basket of currencies on Tuesday after Federal Reserve Chair Jerome Powell said the U.S. central bank is likely to raise rates more than previously expected and warned that the process of getting inflation back to 2% has “a long way to go.”
The greenback reached 137.14 Japanese yen, up around 0.91% on the day and the highest since Dec. 20.
The Fed is prepared to move in larger steps if the “totality” of incoming information suggests tougher measures are needed to control price increases, Powell told U.S. lawmakers on Tuesday.
Friday's employment report for February will also give clues on whether January’s blockbuster report, which showed employers added a much more-than-expected 517,000 jobs, was a one-off spike or part of a more sustained trend.
U.S. stock futures were flat on Tuesday night. The action comes after a selloff spurred by Federal Reserve Chairman Jerome Powell’s comments indicating interest rates may need to go higher for longer.
Dow Jones Industrial Average futures ticked higher by 2 points, or 0.01%. S&P 500 and Nasdaq 100 futures slipped by 0.04% and 0.05%, respectively.
The shakeup in markets came after Fed Chair Powell spoke before the Senate Banking, Housing and Urban Affairs Committee. He cautioned lawmakers that the central bank’s terminal rate will likely be higher than previously anticipated due to stubbornly high economic data in recent weeks.
Oil prices fell by $3 a barrel on Tuesday after comments from U.S. Federal Reserve Chair Jerome Powell stoked rate hike fears, the dollar strengthened and top crude importer China issued weak data.
Brent crude futures shed $2.89, or 3.4%, to settle at $83.29 a barrel, while the U.S. West Texas Intermediate crude futures dropped by $2.88, or 3.6%, to close at $77.58 per barrel. Those were the biggest single day percentage declines for both contracts since Jan. 4.
Gold prices fell more than 1% on Tuesday, as the dollar jumped after Federal Reserve Chair Jerome Powell indicated rate hikes could come at a faster pace from the U.S. central bank in his testimony to a congressional committee.
Spot gold was last down 1.77% at $1,814.21 per ounce. U.S. gold futures fell 1.9% to settle at $1,817.70 per ounce.
European markets fell on Tuesday, as traders followed U.S. Federal Reserve Chair Jerome Powell’s congressional testimony.
The pan-European Stoxx 600 closed 0.8% lower provisionally after trading flat for most of the session, as all sectors slid into the red. Mining stocks led losses, down 2.5%, while tech stocks fell 1.8%.