Macro Roundup (Oct 15)

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

The dollar was slightly lower on Thursday in choppy trading, having erased most of its early session losses, as investors bet the Federal Reserve would begin tapering its asset purchases next month and attention turned to the timing of interest rate hikes.

The greenback had rallied since early September on expectations the U.S. central bank would tighten monetary policy more quickly than previously expected amid an improving economy and surging inflation.

But the dollar reversed course on Wednesday, even after the minutes of the Fed’s Sept. 21-22 policy meeting confirmed the tapering of stimulus is likely to start this year and data showed that pricing pressures were still hitting U.S. consumers.

“I think what we’ve seen over the last day or two is a little bit of profit-taking,” said Shaun Osborne, chief FX strategist at Scotia Capital.

“I don’t think this is, at the moment, anything close to a significant reversal in the dollar trend, and in fact, I think what we’ve seen today might be a sign that the corrective rebound that we’ve seen over the past day or two has perhaps run its course,” he said.

U.S. stock index futures were little changed during overnight trading on Thursday, after the S&P 500 posted its best day since March on stronger-than-expected earnings.

Futures contracts tied to the Dow Jones Industrial Average gained 36 points. S&P 500 futures advanced 0.11%, while Nasdaq 100 futures were up 0.12%.

During regular trading the S&P 500 advanced 1.71%, registering its best day since March 5. The Dow gained 1.55%, snapping a four-day losing streak. The 30-stock benchmark had its best day since July 20. The Nasdaq Composite gained 1.73% for its best day since May. All three averages are on track to end the week in the green.

The gains come amid a strong start to earnings season. Eight members of the S&P 500 posted quarterly results on Thursday morning, with each one topping Wall Street’s expectations. Financial heavyweights Bank of America, Morgan Stanley and Citigroup were among the names that reported.

Oil prices rose on Thursday after top oil producer Saudi Arabia dismissed calls for additional OPEC+ supply and the International Energy Agency said surging natural gas prices could boost demand for oil among power generators.

The market trimmed gains after U.S. crude inventories rose more than anticipated as refiners cut production in a generally slower period for those facilities.

Brent crude futures gained 57 cents, or 0.7%, to $83.76 a barrel after hitting a session high of $84.50 a barrel. U.S. West Texas Intermediate (WTI) crude futures rose 52 cents to $80.96.

U.S. crude stocks rose by a surprising 6 million barrels, much higher than the modest 702,000-barrel increase analysts had expected. Production edged higher, reaching 11.4 million bpd.

Gold touched a one-month high on Thursday, as a dip in the dollar and U.S. bond yields allowed investors to turn to bullion as an inflation hedge.

Spot gold gained 0.2% at $1,796.59 per ounce by 13:46 p.m. EDT, after hitting its highest since Sept. 15 at $1,800.12. U.S. gold futures settled up 0.2% at $1,797.9.

Gold also seemed to largely overlook better U.S. weekly labor data.

The pan-European Stoxx 600 climbed 1.2% by the close, with basic resources adding 3.3% to lead gains.

Investors were digesting fresh U.S. inflation numbers, which rose higher than expected in September, increasing pressure on the Fed to tighten policy.

Earnings season is gathering steam, and looks set to drive individual share price movement in the coming weeks.