Macro Roundup (Jun 9)

SHANGHAI, Jun 9 (SMM) — This is a roundup of global macroeconomic news last night and what is expected today.

The US dollar edged up slightly and currency market volatility on Tuesday hit the lowest level in more than a year, as investors sat on the sidelines waiting for clearer signals on inflation levels and central bank policies around the world.

With inflation updates expected from China, Europe and the United States this week and an impending European Central Bank meeting on Thursday to be followed by a U.S. Federal Reserve meeting next week, currency investors appeared to be treading water while the S&P 500 dipped very slightly.

Range-bound currency markets meant a fall in volatility. The Deutsche Bank Currency Volatility Index hit its lowest level since February 2020.

Traders on Tuesday sent longer-term U.S. Treasury yields to their lowest in more than a month after a report showed small business owners less confident, and narrowing the spread of a closely watched part of the yield curve.

The dollar index was last up 0.12%, while the euro fell 0.09% against the greenback to $1.2179.

On Wall Street, stock futures were flat in overnight trading on Tuesday after Wall Street appeared range-bound near its record levels.

Futures on the Dow Jones Industrial Average were little changed. S&P 500 futures and Nasdaq 100 futures also held steady.

The S&P 500 and the blue-chip Dow both closed near the flatline on Tuesday. The broad equity benchmark is now just 0.3% below its record high of 4,238.04 reached on May 7. Investors await the next reading on inflation to gauge if higher price pressures are just temporary as the economy continues to rebound from the pandemic-induced recession.

Oil prices edged higher on Tuesday after the top U.S. diplomat said that even if the United States were to reach a nuclear deal with Iran, hundreds of U.S. sanctions on Tehran would remain in place.

That could mean additional Iranian oil supply would not be re-introduced into the market soon.

Brent crude settled 73 cents, or 1%, higher at $2.22 per barrel. U.S. West Texas Intermediate oil advanced 1.18%, or 82 cents, to $70.05 per barrel.

In China, data showing China’s crude imports were down 14.6% in May on a yearly basis weighed on futures.

Gold dropped on Tuesday as a firmer dollar countered a slip in U.S. Treasury yields as investors looked ahead to U.S. inflation data that could influence the Federal Reserve’s timeline to taper monetary support.

Spot gold was down 0.4% to $1,892.33 per ounce by 1:42 p.m. EDT (1742 GMT) while U.S. gold futures settled down 0.2% at $1,894.40.

The dollar index rose 0.2%, lowering gold’s appeal for holders of other currencies, while benchmark U.S. Treasuries fell to a one-month trough.

Analysts noted that US consumer price index data due on Thursday could spark fears that the Fed will begin a move to scale back its wide-open monetary policy, driving gold prices lower.

European stocks closed slightly higher Tuesday after revised euro zone growth data showed the region’s economy contracted by much less than expected in the first quarter of the year.

Revised data from the EU’s statistics office Eurostat showed gross domestic product (GDP) in the 19-member euro zone contracted 0.3% quarter-on-quarter, compared with the last estimate predicting a 0.6% contraction.

However, data showing an unexpected fall in Germany’s industrial output in April weighed on sentiment.

The pan-European Stoxx 600 index finished Tuesday’s session up about 0.1% higher. Travel shares led the gains, climbing 1.8%, while auto shares fell 1.1%.