Macro Roundup (Apr 27)

SHANGHAI, Apr 27 (SMM) — This is a roundup of global macroeconomic news last night and what is expected today.

The dollar rose from an eight-week low against the euro on Monday, also gaining against major currencies such as the yen and Swiss franc, with investors consolidating positions ahead of the Federal Reserve’s monetary policy meeting this week.

The Federal Open Market Committee ends its two-day meeting on Wednesday, and while no major policy changes are expected, investors will pay close attention to comments from Chairman Jerome Powell.

Powell is likely to face questions over whether an improving labor market and rising coronavirus vaccinations warrant a withdrawal of monetary easing. Most analysts though expect him to say such talk is premature, which could put downward pressure on Treasury yields and the dollar.

Overnight on Wall Street, the S&P 500 nudged 0.18% higher to a closing record of 4,187.62 while the Dow Jones Industrial Average shed 61.92 points to 33,981.57. The Nasdaq Composite gained 0.87% to a new record close of 14,138.78.

Oil prices fell on Monday on fears that surging COVID-19 cases in India will drive down fuel demand in the world’s third biggest oil importer and as investors adjusted positions ahead of a planned increase in OPEC+ oil output from May.

Brent crude futures settled 0.7% lower at $65.65 per barrel, following a 1.1% rise on Friday. U.S. West Texas Intermediate (WTI) crude futures slid 0.37% to settle at $61.91 per barrel, after rising 1.2% on Friday.

Both benchmark crudes fell about 1% last week.

Prime Minister Narendra Modi urged all citizens to be vaccinated and exercise caution, saying on Sunday the “storm” of infections had shaken India, as the country set a new global record for the most COVID-19 infections in a day.

In Japan, the world’s fourth-largest oil buyer, a third state of emergency in Tokyo, Osaka and two other prefectures began on Sunday, affecting nearly a quarter of the population as the country attempts to combat a surge in cases.

Gold prices steadied in a relatively tight range on Monday as investors awaited policy cues from the Federal Reserve’s meeting this week, while deficit-stricken palladium scaled a record peak.

Spot gold was up 0.1% to $1,778.50 per ounce, having hit near a one-week low of $1,768.15. U.S. gold futures settled 0.13% higher at $1,780.1.

German business sentiment rose by less than expected in April, the Ifo Institute’s business climate index revealed Monday, as a third wave of Covid-19 infections and industrial sector supply problems weighed on the recovery of Europe’s largest economy.

Investors are bracing for a busy week of economic events and data in the U.S. this coming week, with more U.S. corporate earnings due (some of the largest companies in the world are scheduled to publish results this week including Apple, Microsoft, Amazon and Alphabet) as well as big data releases, including the latest gross domestic product data due Thursday and inflation data Friday.

In addition, the U.S. Federal Reserve is holding a monetary policy meeting on Tuesday and Wednesday, and market participants will be closely watching for clues on whether the central bank is nervous about the prospect of rising inflation. It has previously said it sees the pickup in prices as only temporary.

Fed Chairman Jerome Powell will host a press conference Wednesday afternoon to discuss the Federal Open Market Committee’s decision. U.S. stocks were slightly higher on Monday in anticipation of the busy week ahead.