SHANGHAI, Jan 26 (SMM) — This is a roundup of global macroeconomic news last night and what is expected today.
The euro fell to a one-month low on Tuesday as tensions between Russia and the West over Ukraine drew investors to the dollar, a day before the Federal Reserve is expected to reveal details on its plans to tighten monetary policy.
Western leaders stepped up preparations for any Russian military action in Ukraine while Moscow said it was watching with great concern after 8,500 U.S. troops were put on alert to deploy to Europe in the event of an escalation.
Tensions remained high after NATO said on Monday it was putting forces on standby and reinforcing eastern Europe with more ships and fighter jets in response to Russia’s troop build-up near its border with Ukraine.
The rouble rebounded to strengthen 0.54% to 78.62 per dollar after earlier weakening toward a more than 14-month low.
Ukraine tensions have exposed the euro and Europe, especially regarding energy, but the dollar’s strength has more to do with Fed policy tightening, said Alvise Marino, director of FX strategy at Credit Suisse.
The Dow Jones Industrial Average closed down Tuesday, but well off its session lows in another rollercoaster session as the Federal Reserve prepares investors for tighter monetary policy.
The blue-chip average shed 67.77 points, or 0.2%, to close at 34,297.73. The index swung from a nearly 819-point deficit at its lows to a roughly 226-point rally at its highs during the session. The S&P 500 dipped 1.2% to 4,356.45. The technology-heavy Nasdaq Composite fell 2.3% to 13,539.30.
Tuesday’s market action came after the Dow on Monday rallied from a more than 1,000-point loss to close higher for the first time ever. The Nasdaq Composite reversed a 4.9% decline from earlier in the day to finish positive — its biggest rebound since 2008. The S&P 500 also rallied from major losses to close up.
Oil prices rose over 2% on Tuesday on concerns supplies could become tight due to Ukraine-Russia tensions, threats to infrastructure in the United Arab Emirates and struggles by OPEC+ to hit its targeted monthly output increase.
Analysts noted that oil prices rose despite a drop in equities markets and the possibility of an interest rate hike by the U.S. Federal Reserve on Wednesday.
Brent futures rose $1.93, or 2.24%, to $88.20 per barrel, while U.S. West Texas Intermediate (WTI) crude settled $2.29, or 2.75%, higher at $85.60 per barrel.
Gold hit a more than two-month high on Tuesday as geopolitical concerns over Ukraine pushed investors toward safe havens including bullion, ahead of the U.S. Federal Reserve’s meet that could offer cues on its monetary policy tightening plan.
Spot gold rose 0.5% to $1,852.03 per ounce by 2:03 p.m. ET, after hitting its highest since Nov. 19 at $1,852.65. U.S. gold futures settled up 0.6% at $1,852.50.
The pan-European Stoxx 600 rose 0.8%, with banks leading the gains while tech shares fell.
Investors are bracing for an update from the Fed and remain focused on tensions over Ukraine.
Ericsson gained almost 8% after beating fourth-quarter earnings expectations.