Macro Roundup (Nov 25)

SHANGHAI, Nov 25 (SMM) — This is a roundup of global macroeconomic news last night and what is expected today.

The dollar paused on Wednesday after a surge that followed the reappointment of Federal Reserve chair Jerome Powell, who was seen as the more hawkish choice, while the New Zealand dollar eased after a smaller than expected rate hike.

The euro held just above a 16-month trough at $1.1238, having found a measure of support from stronger-than-expected European business surveys. The yen sat just above a four-year low at 115.13 to the dollar.

The kiwi was the biggest mover in an otherwise quiet Asian session and fell as far as 0.5% to $0.6915 after the Reserve Bank of New Zealand lifted rates 25 basis points (bps) and raised its long-term cash rate projection by 50 bps.

U.S. stocks pushed modestly higher on Wednesday as the recent jump in bond yields took a breather, allowing tech stocks to recover.

The S&P 500 ticked up 0.23% to close at 4,701.46, while the tech-heavy Nasdaq Composite added 0.44% to finish at 15,845.23. The Dow Jones Industrial Average lost just 9.42 points and settled at 35,804.38.

The recent rise in yields, which started around President Joe Biden’s decision to renominate Jerome Powell as chairman of the Federal Reserve on Monday, cooled slightly on Wednesday. The 10-year Treasury yield has traded above 1.68% this week after ending Friday at 1.55%. However, the benchmark rate had dipped to about 1.64% on Wednesday afternoon.

Oil prices were largely steady on Wednesday as investors questioned the effectiveness of a U.S.-led release of oil from strategic reserves and turned their focus to how producers will respond.

Brent crude declined 6 cents to settle at $82.25 per barrel, while U.S. West Texas Intermediate (WTI) crude futures settled 11 cents lower at $78.39 per barrel.

The United States said it would release millions of barrels of oil from strategic reserves in coordination with China, India, South Korea, Japan and Britain to try to cool prices after OPEC+ ignored calls to pump more.

Gold prices slipped on Wednesday as robust U.S. economic data lifted the dollar and Treasury yields ahead of minutes from the Federal Reserve’s November meeting that could provide cues on future interest rate hikes.

Spot gold fell 0.4% to $1,782.81 per ounce by 10:31 a.m. ET (1531 GMT), and U.S. gold futures were down 0.1% at $1,781.70.

The pan-European Stoxx 600 closed up 0.1% after choppy trading earlier in the session. Telecoms shares rose 1.2% to lead the gains while autos stocks sank 1.5%.

Germany is expected to make a decision on stricter Covid curbs Wednesday amid a surge in cases.

German political parties agreed to form a three-way coalition after almost two months of talks.