Macro Roundup (Jun 23)

SHANGHAI, Jun 23 (SMM) — This is a roundup of global macroeconomic news last night and what is expected today.

The dollar paused for breath on Tuesday as traders looked to testimony from US Federal Reserve chair Jerome Powell for guidance, after a surprise shift in the central bank’s policy outlook, while cyptocurrencies nursed heavy losses.

The greenback has gained sharply since the Fed last week flagged sooner-than-expected interest rate hikes, but dipped on Monday to hand back a little bit of that rise.

Against the euro, the dollar nursed an overnight loss of about 0.4% to steady around $1.1909. It held at 110.31 yen, and the dollar index was steady at 91.915 after a loss of about 0.5% on Monday.

The Australian and New Zealand dollars eased — after snapping losing streaks on Monday — with the Aussie down 0.2% to $0.7527 and the kiwi down 0.15% to $0.6978.

On the Wall Street, US stock index futures were little changed during overnight trading on Tuesday, after the S&P 500 closed just shy of a new record.

Futures contracts tied to the Dow Jones Industrial Average advanced 28 points. S&P 500 futures were flat, while Nasdaq 100 futures gained 0.07%.

All three major averages finished Tuesday’s session in the green, reversing losses from earlier in the session amid strength in the technology sector.

The S&P 500 advanced 0.5%, to close just 0.2% away from a fresh all-time closing high. The Dow rose 163 points after earlier in the session falling more than 120 points. The Nasdaq Composite was the relative outperformer, hitting a new intraday all-time high and posting a 0.8% gain on the session for a new record close.

Federal Reserve Chairman Jerome Powell testified before the House of Representatives on Tuesday, which appeared to lift sentiment as he reiterated that inflation pressures will be temporary.

As for oil, crude dropped on Tuesday as investors cashed in on a recent rally, but market sentiment remained solid on hopes for a quick recovery in oil demand in the US and European markets and fading expectations for an early return of Iranian crude.

Brent crude futures for August dipped 0.12% to settle at $74.81 per barrel, while US West Texas Intermediate (WTI) crude for July was at $73.06 a barrel, down 0.8%.

Brent gained 1.9% and WTI jumped 2.8% on Monday.

Both benchmarks have risen for the past four weeks on optimism over the pace of global COVID-19 vaccinations and expected pick-up in summer travel. The rebound has pushed up spot premiums for crude in Asia and Europe to multi-month highs.

Gold retreated on Tuesday as traders awaited more clarity on monetary policy after the central bank struck a hawkish tone last week.

Spot gold fell 0.3% to $1,777.91 per ounce by 1:35 pm EDT (1735 GMT), while US gold futures for August settled down 0.3% at 1,777.4.

Market participants are awaiting congressional testimony from Powell, from 1800 GMT, after the Fed signaled interest rates could rise into 2023 and it would begin taper asset purchases, which drove a 6% slide in gold last week.

The pan-European Stoxx 600 ended the session up by nearly 0.3%, having fluctuated between gains and losses earlier in the day. Most sectors and major bourses were in positive territory, with basic resources shares climbing 1.3% to lead gains.

French media group Vivendi on Tuesday won the backing of shareholders for its proposed spin-off of crown jewel Universal Music Group.