Macro Roundup (Sep 24)

SHANGHAI, Sep 24 (SMM) — This is a roundup of global macroeconomic news last night and what is expected today.

The dollar fell across the board on Thursday as improved risk sentiment in global financial markets wiped out its gains in the previous session after the U.S. Federal Reserve flagged plans to dial back its stimulus this year.

Investors’ risk appetite improved after Beijing injected fresh cash into its financial system ahead of an $83.5 million bond coupon by embattled property giant Evergrande, at risk of becoming one of the world’s largest-ever corporate defaults.

Worries about Evergrande’s payment obligations and what systemic risks to China’s financial system the property giant’s difficulties pose have weighed on global financial risk sentiment in recent sessions.

“Commodity currencies are broadly higher while havens are weaker, leaving the USD trading generally lower after a firm close following the FOMC (Federal Open Market Committee),” Shaun Osborne, chief currency strategist at Scotiabank, said in a note.

The U.S. Dollar Currency Index, which measures the greenback against a basket of six rivals, was 0.5% lower at 93.037. The index, which had risen 0.25% on Wednesday, was on pace for its biggest daily percentage drop in a month but remains close to the near 10-month high touched in late August.

The offshore Chinese yuan strengthened versus the greenback at 6.4599 per dollar.

On Wall Street, stock futures were flat in overnight trading on Thursday after two straight days of gains pushed major averages into positive territory for the week.

Futures on the Dow Jones Industrial Average were up 20 points. S&P 500 futures and Nasdaq 100 futures were little changed.

The market staged a two-day relief rally after the Federal Reserve signaled no imminent removal of its ultra-easy monetary policy. Investors also bet that the debt crisis of China’s real estate giant Evergrande wouldn’t trigger a ripple effect across global markets.

The blue-chip Dow advanced 500 points on Thursday for its best daily performance since July 20. The S&P 500 gained 1.2%, while the tech-heavy Nasdaq Composite rose 1%.

Oil prices rose on Thursday, supported by growing fuel demand and a draw in U.S. crude inventories as production remained hampered in the Gulf of Mexico after two hurricanes.

Brent crude advanced 1.39% to settle at $77.25 a barrel. U.S. West Texas Intermediate (WTI) crude rose gained 1.48% to settle at $73.3 per barrel.

“Oil prices continue to thrive on the momentum of supply constraints in the U.S. Gulf of Mexico, which was reflected in the large crude inventory draws report of last week,” said Rystad Energy analyst Louise Dickson.

Both contracts jumped 2.5% on Wednesday after data from the U.S. Energy Information Administration showed U.S. crude stocks in the week to Sept. 17 fell by 3.5 million barrels to 414 million - the lowest total since October 2018.

Gold fell 1% on Thursday, pressured by an uptick in treasury yields and an appetite for riskier assets, as investors continued to position themselves for a sooner-than-expected interest rate hike from the U.S. Federal Reserve.

Spot gold declined 0.9% to $1,751.56 per ounce by 2:11 a.m. ET and U.S. gold futures settled 1.6% lower at $1,749.80.

The pan-European Stoxx 600 index closed up by 0.9% Thursday, with all sectors and most major bourses in positive territory.

The Bank of England kept monetary policy unchanged and downgraded economic growth projections for the third quarter of this year.