Macro Roundup (Jan 12)

Published: Jan 12, 2021 09:00 (GMT+8)
The dollar edged higher across the board on Monday, extending a rebound from the near 3-year low hit last week, taking strength from the recent spike in Treasury yields and the prospect of a growth boost from higher U.S. fiscal stimulus.

SHANGHAI, Jan 12 (SMM) — This is a roundup of global macroeconomic news last night and what is expected today.

The dollar edged higher across the board on Monday, extending a rebound from the near 3-year low hit last week, taking strength from the recent spike in Treasury yields and the prospect of a growth boost from higher U.S. fiscal stimulus.

U.S. President-elect Joe Biden, who takes office on Jan. 20 with Democrats able to control both houses of Congress, has promised “trillions” in extra pandemic-relief spending.

Ordinarily, the extra spending plans would force investors to worry about rising inflation and its detrimental effect on the U.S. dollar in a weak economy, but the currency has been supported in recent weeks thanks to rising U.S. yields.

U.S. government bond yields have logged big moves in recent sessions, with the Treasury yield curve experiencing a significant increase in yields in longer-dated bonds.

On Wall Street, US equity futures were flat in overnight trading on Monday after breaking a win streak as investors grew worried about stocks’ stretched valuations.

Dow futures rose 20 points. S&P 500 futures popped 0.07% and Nasdaq 100 futures rose 0.18%.

On Monday, equities dipped as investors evaluated lofty stock valuations amid recent record highs, seemingly disregarding the backdrop of Covid-19 and political turmoil.

On Monday, the Dow Jones Industrial Average lost nearly 90 points, dragged down by a 2.3% drop in Apple’s stock. The S&P 500 dipped 0.66%.

Oil prices were little changed on Monday as tough coronavirus lockdowns around the world renewed concerns about global fuel demand, while a stronger U.S. dollar also weighed on prices.

U.S. West Texas Intermediate crude settled 1 cent higher at $52.25 per barrel. International benchmark Brent crude fell 33 cents, or 0.6%, to settle at $55.66 per barrel.

“The renewed concerns about demand due to very high numbers of new corona cases and further mobility restrictions, plus the stronger U.S. dollar, are generating selling pressure,” Commerzbank analyst Eugen Weinberg said.

Worldwide coronavirus cases surpassed 90 million, according to a tally.

Despite strict national lockdowns, Britain is facing the worst weeks of the pandemic, and in Germany cases are still rising.

Gold eased on Monday, having touched a six-week low earlier in the session, clamped down by a firm dollar and higher U.S. Treasury yields due to hopes of more fiscal stimulus.

Spot gold was down 0.1% at $1,846.61 per ounce, after touching its lowest level since Dec. 2 at $1,816.53. U.S. gold futures, meanwhile, settled up 0.8% at $1,850.80.

“We’ve seen a little rebound in the dollar, a slight pickup in yields and as a result we have seen some commodities’ markets, including the metals pull back,” said David Meger, director of metals trading at High Ridge Futures.

A “quiet period” prior to the inauguration of the Joe Biden administration in Washington “and the Democratic agenda being put forward” in terms of interest rates, liquidity and stimulus, is also weighing on the metals, Meger added.

US JOLTs Job Openings in November, US API Weekly Crude Oil Stock Change as of January 8 and US API Weekly Gasoline Stock Change as of January 8 will be released today.

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Macro Roundup (Jan 12) - Shanghai Metals Market (SMM)