Macro Roundup (Jan 14)

SHANGHAI, Jan 14 (SMM) — This is a roundup of global macroeconomic news last night and what is expected today.

The dollar fell against a basket of currencies on Thursday to a two-month low, a day after data that showed an expected surge in U.S. consumer prices in December fell short of offering any new impetus for the Federal Reserve’s policy normalization efforts.

The U.S. Dollar Currency Index , which tracks the greenback against six major currencies, was down 0.2% at 94.791, its lowest since Nov. 10. The index, which rose 6.3% in 2021, is down about 1% for the week, on pace for its worst weekly performance in about eight months.

December’s monthly U.S. consumer inflation figures, published on Wednesday, were a fraction higher than forecast and the increase in year-on-year consumer prices was, as expected, 7% - its biggest jump since June 1982.

Nevertheless, traders do not see these inflation readings as urgently shifting an already hawkish Fed too much. With at least three interest rate hikes already in the market price, some investors pared bets on further dollar gains.

U.S. stock index were little changed during overnight trading on Thursday, ahead of earnings from the major banks on Friday.

Futures contracts tied to the Dow Jones Industrial Average advanced 29 points. S&P 500 futures were up 0.08%, while Nasdaq 100 futures rose 0.12%.

All of the major averages slid during regular trading on Thursday. The Dow and S&P 500 fell 0.48% and 1.42%, respectively, registering the first down day in three. At one point the 30-stock benchmark had been up more than 200 points.

The Nasdaq Composite was the relative underperformer, shedding 2.51% and snapping a three-day winning streak as technology stocks came under pressure. Microsoft declined more than 4%, while Nvidia dipped 5%. Apple, Amazon, Meta, Netflix and Alphabet also closed lower.

Investors have rotated out of growth and into value stocks amid rising rate fears, which makes future profits — including from growth companies — look less attractive.

Oil prices edged lower on Thursday as investors took profits after two days of gains amid fears of aggressive U.S. interest rate hikes, but the losses were cushioned by expectations that a strong economic recovery will boost demand.

U.S. West Texas Intermediate (WTI) crude futures settled 52 cents, or 0.63%, lower at $82.12 per barrel, after rising 5.6% over the last 2 days.

Brent crude futures settled 0.24% lower at $84.47 per barrel. It had gained 4.7% over Tuesday and Wednesday.

Gold prices retreated on Thursday, as U.S. Treasury yields edged up with the Federal Reserve likely to raise interest rates in March.

Spot gold fell 0.3% to $1,820.71 per ounce by 14:17 ET (1917 GMT). U.S. gold futures settled down 0.3% at $1,821.40.

Expectations around a Fed interest rate hike lifted U.S. Treasury yields higher, potentially increasing the opportunity cost of holding non-yielding gold.

The pan-European Stoxx 600 hovered around the flatline during afternoon deals but closed lower by 0.2%. Household goods dropped 1.2% while autos gained 1.6%.

In terms of individual share price movement, Netherlands-based BE Semiconductor climbed 9% to lead the Stoxx 600.

At the bottom of the European blue chip index, Britain’s Countryside Properties plunged more than 21% after announcing that its CEO will step down with immediate effect, and revealing that first-quarter trading in the new financial year has been below the board’s expectations.