Macro Roundup (Feb 5)

Published: Feb 05, 2021 09:05 (GMT+8)
The dollar climbed toward a fifth straight daily gain on Thursday on confidence in the U.S. economic outlook and the possibility that Friday’s jobs report will be stronger than expected.

SHANGHAI, Feb 5 (SMM) — This is a roundup of global macroeconomic news last night and what is expected today.

The dollar climbed toward a fifth straight daily gain on Thursday on confidence in the U.S. economic outlook and the possibility that Friday’s jobs report will be stronger than expected.

The U.S. dollar index rose 0.5% in New York afternoon trading to 91.509, up 1.7% for the year and its highest level in two months.

The move came with a 0.6% decline in the euro, which fell to $1.1966, below what had seemed a resistance level of $1.20 earlier this week. It was its first move below $1.20 since Dec. 1.

“There’s a fundamental shift here in the short term where we are seeing the U.S. economic outlook really overpowering what we are seeing in the euro zone,” said Ed Moya, senior market analyst at OANDA.

That view was reinforced on Thursday when the U.S. government said the number of Americans filing new applications for unemployment benefits decreased last week.

Initial claims for state unemployment benefits totaled a seasonally adjusted 779,000 last week, better than economists had forecast and better than 812,000 in the prior week. The government will release on Friday its payroll job count for January, and economists are expecting a gain of 50,000 after a December decline of 140,000.

On Wall Street, the S&P 500 rose 1.1% to a record closing high of 3,871.74. The Dow Jones Industrial Average surged 332.26 points to close at 31,055.86 while the Nasdaq Composite advanced 1.2% to 13,777.74, also touching a new high.

Oil rose on Thursday on strong U.S. economic data, falling inventories and the OPEC+ decision to stick to its output cuts, but a stronger U.S. dollar limited prices.

Brent crude gained 41 cents, or 0.7%, to $58.87 a barrel, having earlier hit its highest level since Feb. 21 at $59.04.

U.S. West Texas Intermediate (WTI) crude settled 0.6% higher at $56.02 a barrel.

Gold dropped more than 2% on Thursday to break below the key psychological $1,800 level as a rising dollar and U.S. Treasury yields eroded bullion’s appeal.

Spot gold fell 2.3% to $1,791.76 per ounce by 1:43 p.m. EST (1843 GMT), after touching a more than two-month low of $1,784.76. U.S. gold futures settled down 2.4% at $1,791.20.

Silver dropped 2.3% to $26.26.

Silver prices have declined more than 13% since a GameStop-style retail frenzy sent them to their highest in nearly eight years at $30.03 on Monday.

The Bank of England on Thursday left monetary policy unchanged following its first meeting of 2021, with its main lending rate held at 0.1% and target stock of asset purchases kept at £895 billion ($1.2 trillion).

The Bank’s Prudential Regulation Authority also said in a letter to lenders that British banks will need at least six months to prepare for a potential shift to negative interest rates.

Key economic data slated for release today include US non-farm employment and unemployment rate for January and trade balance for December.

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