Macro Roundup (Jun 3)

SHANGHAI, Jun 3 (SMM) — This is a roundup of global macroeconomic news last night and what is expected today.

The dollar was nearly flat on Wednesday in choppy trading, after backing off of an almost five-month trough versus major peers, as traders waited for employment data later in the week to paint a clearer picture of the state of the U.S. economic recovery.

The dollar index, which measures the greenback against six rival currencies, was up 0.001% at 89.907 at 2:34 p.m. ET, after trading in a range of 89.856 and 90.247.

The previous jobs report, for April, came in much weaker than expected, sending the dollar sharply lower. Then earlier this week, manufacturing data showed that while activity spiked due to pent-up demand amid the reopening from COVID-19 shutdowns, labor shortages actually hampered the sector’s growth potential.

Another weak nonfarm payroll report would put pressure on Treasury yields, which in turn would weigh on the greenback.

On Wall Street, US stock futures were flat on Wednesday night following a quiet day of trading.

Futures for the Dow Jones Industrial Average inched up 8 points, or less than 0.1%. S&P 500 and Nasdaq 100 futures also gained marginally.

During the regular session, the 30-stock Dow rose just 25.07 points to close at 34,600.38. Similarly, the S&P 500 and the Nasdaq Composite ended the day up 0.14%.

Energy stocks were the biggest gainers Wednesday, with Occidental Petroleum rising 4.1%, Diamondback Energy increasing 2.5% and Marathon Oil moving up 1.4%. The broad Energy Select Sector SPDR ETF rose 2.1%.

Oil prices rose on Wednesday, supported by an OPEC+ decision to stick to its plan to restore supply to the market gradually and by the slow pace of nuclear talks between Iran and the United States.

Brent crude futures settled 1.57% higher at $71.35 per barrel. U.S. West Texas Intermediate (WTI) crude futures advanced 1.64% to settle at $68.83 per barrel, the highest level since Oct. 2018.

“The strong demand dynamics and likely delays in the Iran nuclear deal negotiations pushed oil prices above the much-watched $70 per barrel level,” said Norbert Rucker, analyst at Swiss bank Julius Baer.

“We expect oil prices to move well beyond $70 per barrel towards mid-year.”

Gold prices rose on Wednesday, hovering below a near five-month peak hit the previous session, as U.S. Treasury yields pulled back, while investors awaited key economic data this week that will shed light on the outlook for inflation.

Spot gold was up 0.4% at $1,906.80 per ounce at 1:43 p.m. EDT (1743 GMT), after hitting its highest since Jan. 8 at $1,916.40 on Tuesday. U.S. gold futures settled up 0.3% at $1,909.90.

The anticipation of some of the economic news that’s coming out this week may further the concerns regarding inflation and will have a positive impact on the momentum in the gold market.

The euro edged 0.01% lower against the dollar to $1.2215 after pulling back from near a multimonth top overnight, when it touched $1.22545.

The pan-European Stoxx 600 ended the session up almost 0.3%, with autos shares rising 1.3% to lead gains as most sectors and major bourses closed in positive territory.

Producer prices in the euro zone rose more than expected in April, boosted by a surge in energy costs, data showed. But the European Central Bank, which wants to keep consumer price growth close to 2% over the medium term, said that while inflation may temporarily rise above its target this year, anemic wage growth will likely keep it in check for years to come.