Macro Roundup (Apr 7)

SHANGHAI, Apr 7 (SMM) — This is a roundup of global macroeconomic news last night and what is expected today.

The U.S. dollar fell to a two-week low against a basket of currencies on Tuesday, as traders booked profits after a strong March and as a fall in Treasury yields from recent peaks put pressure on the U.S. currency.

The U.S. Dollar Currency Index, which measures the greenback against a basket of six currencies, was 0.239% lower at 92.341, its lowest since March 23.

The dollar has risen this year, along with Treasury yields, as investors bet the United States would recover more quickly from the coronavirus pandemic than other developed nations, amid massive stimulus and aggressive vaccinations.

On Wall Street, U.S. stock index futures advanced during overnight trading, after the major averages finished Tuesday’s session in the red.

Futures contracts tied to the Dow Jones Industrial Average gained 51 points, or 0.15%. S&P 500 futures rose 0.13%, while Nasdaq 100 futures were up 0.18%.

The major averages pulled back from record highs to close in negative territory during regular trading. The Dow slid 97 points, or 0.3%, breaking a two-day winning streak. The S&P hit a record high, but retreated during afternoon trading and ultimately closed 0.1% lower for its first negative session in four. The Nasdaq Composite declined 0.05%, also snapping a three-day winning streak.

Strong economic data from China and the United States helped to lift oil prices on Tuesday, recouping some of the previous session’s losses, as coronavirus-led volatility continues to dominate.

Brent rose 59 cents to settle at $62.74 per barrel. U.S. West Texas Intermediate (WTI) crude settled 68 cents, or 1.16%, higher at $59.33 per barrel.

Market sentiment was buoyed as March data showed U.S. services activity hit a record high. China’s service sector has also gathered steam with the sharpest increase in sales in three months.

In addition, England is set to ease more coronavirus restrictions on April 12, with the opening of businesses including all shops, gyms, hair salons and outdoor hospitality areas.

However, new restrictions in most of Europe and rising infections in India weighed on prices.

Gold prices rose about 1% on Tuesday and hit the highest in more than a week, boosted by as a retreating dollar and lower U.S. Treasury yields.

Spot gold rose 0.8% to $1,743.04 per ounce by 2:11 p.m. ET, after hitting its highest level since March 25 at $1,745.15. U.S. gold futures settled 0.8% higher at $1,743.

Gold has been lifted temporarily by a steady decline in the dollar index and lower Treasury yields, said Phillip Streible, chief market strategist at Blue Line Futures in Chicago.

The International Monetary Fund on Tuesday raised its 2021 growth outlook for the global economy to 6%, up from January’s forecast of 5.5%. The organization said that “a way out of this health and economic crisis is increasingly visible.” The IMF did, however, warn of “daunting challenges” given the varied pace of vaccine rollouts around the world.