Macro Roundup (Apr 12)

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

The dollar edged higher against a basket of currencies on Friday, paring some of the week’s losses, as a stronger-than-expected rise in U.S. and Chinese inflation gauges drove up bond yields.

The U.S. Dollar Currency Index, which measures the greenback against a basket of six currencies, was 0.10% higher at 92.163.

Data on Friday, showed U.S. producer prices increased more than expected in March, resulting in the largest annual gain in 9-1/2 years, fitting in with expectations for higher inflation as the economy reopens amid an improved public health environment and massive government funding.

Inflation is expected to heat up this year, driven by pent-up demand and as the weak readings last spring drop out of the calculation. Prices tumbled early in the pandemic amid mandatory closures of non-essential businesses across many states to slow the first wave of COVID-19 infections.

Most economists and Federal Reserve officials believe higher inflation will be transitory because of labor market slack.

Earlier on Friday, data showed China’s factory gate prices beat analyst expectations and rose at their fastest annual pace since July 2018 in March, the latest sign that a recovery in the world’s second-largest economy is gathering momentum.

On Wall Street, futures contracts tied to the major U.S. stock indexes ticked lower during the overnight session Sunday evening, suggesting Wall Street could see muted trading on Monday after reaching fresh records last week.

Dow futures lost 35 points, while contracts tied to the S&P 500 and Nasdaq 100 were down 0.2% and 0.3%, respectively.

The tepid movement in the futures market on Sunday followed yet another record close for the Dow Jones Industrial Average on Friday, when it gained nearly 300 points to end at 33,800.6. The S&P 500 gained 0.8% and hit its third straight record close.

Oil prices edged lower in rangebound trade on Friday on rising supplies from major producers and concerns over a mixed picture on the COVID-19 pandemic’s impact on fuel demand.

Brent crude futures for June fell 25 cents to settle at $62.95 a barrel. U.S. West Texas Intermediate (WTI) crude for May settled 28 cents, or 0.47%, lower at $59.32 per barrel.

Both contracts are on track for a 2%-3% drop this week but still far from a low of $60.47 hit two weeks ago.

Downward pressure has been exerted by the decision of the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, to increase supplies by 2 million barrels per day between May and July.

Gold prices fell more than 1% on Friday, weighed down by a jump in U.S. Treasury yields and a rebound in the dollar, but bullion was still on course for its first weekly gain in three weeks.

Spot gold was 0.7% lower at $1,744.07 per ounce by 1:44 p.m. EDT (1744 GMT), having hit its highest price since March 1 at $1,758.45 on Thursday. For the week, however, prices were up about 0.9%.

U.S. gold futures settled down 0.8% at $1,744.8.

German industrial output in February fell 1.6% from the previous month, the Federal Statistics Office revealed Friday, which was well below a consensus forecast of a 1.5% rise.