Macro Roundup (Sep 15)

SHANGHAI, Sep 15 (SMM) — This is a roundup of global macroeconomic news last night and what is expected today.

The dollar fell against major currencies on Tuesday after data showed a less-than-expected rise in US inflation last month, creating uncertainty about the timing of the Federal Reserve’s tapering of asset purchases.

Several Fed officials have suggested the US central bank could reduce its buying of debt securities by the end of the year, but said an eventual interest rate hike would not happen for some time.

The Fed will hold a two-day monetary policy meeting next week, with investors keen to find out whether a tapering announcement will be made.

Tapering tends to benefit the dollar as it suggests the Fed is one step closer toward tighter monetary policy. It also means the central bank will be buying fewer debt assets, effectively reducing the number of dollars in circulation.

Data on Tuesday showing the US consumer price index, excluding the volatile food and energy components, edged up just 0.1% last month has raised doubts about tapering this year, some analysts said.

August’s core CPI rise was also the smallest gain since February and followed a 0.3% rise in July. The so-called core CPI increased 4.0% on a year-on-year basis after gaining 4.3% in July.

On Wall Street, US stock indexes closed lower Tuesday, giving up gains earlier in the session after a better-than-feared inflation reading and falling back into their September doldrums.

The Dow Jones Industrial Average shed 292.06 points, or 0.8%, to 34,577.57. The S&P 500 dipped nearly 0.6% to 4,443.05 and the Nasdaq Composite ticked about 0.5% lower to 15,037.76.

Stocks popped at the open after the August consumer price index, while still showing a significant jump in inflation, came in less than expected. However, the stock averages turned lower roughly half an hour into trading.

Shares linked to the economic recovery dropped. Bank of America lost 2.6%. General Electric took industrial shares into the red, closing 3.9% lower.

Oil prices gave back early gains and were flat on Tuesday, hovering near a six-week high, on signs another storm could affect output in Texas this week even as the US industry struggles to return production after Hurricane Ida wreaked havoc on the Gulf Coast.

Brent crude rose 13 cents, or 0.2% to $73.64 a barrel, having gained 0.8% the previous day. US West Texas Intermediate (WTI) crude was unchanged at $70.45, after rising 1.1% on Monday.

Both benchmarks were hovering near their highest since early August hit the previous day.

Evacuations were underway on Monday from offshore US Gulf of Mexico oil platforms as onshore oil refiners began preparing for Tropical Storm Nicholas, which was heading towards the Texas coast with 70 miles per hour(113 kph) winds, threatening coastal Texas and Louisiana still recovering from Hurricane Ida.

Gold hit a one-week high on Tuesday, as the dollar retreated after a slower-than-expected rise in US inflation led to uncertainty over the US Federal Reserve’s timeline to taper monetary stimulus.

Spot gold rose 0.6% to $1,803.69 per ounce by 1835 GMT, and US gold futures settled up 0.7% at $1,807.10 per ounce.

The pan-European Stoxx 600 provisionally closed little changed, with mining stocks sinking 1.9% while tech shares rose 1.2%.

European Central Bank policymaker Isabel Schnabel said on Monday that the ECB is ready to act if inflation does not ease as soon as next year, as currently expected.