SHANGHAI, Jan 27 (SMM) — This is a roundup of global macroeconomic news last night and what is expected today.
The dollar rose to a three-week on Wednesday after the Federal Reserve signaled that it is likely to raise U.S. interest rates in March as expected and later launch a significant reduction in its asset holdings.
The combined moves will complete a pivot away from the loose U.S. monetary policy that has defined the pandemic era and toward a more urgent fight against inflation.
The Fed’s statement at the end of its two-day policy meeting left questions about the timing of rate hikes and reducing the U.S. central bank’s almost $9 trillion balance sheet, but markets reacted calmly to the statement.
The dollar index measuring the value of the greenback against six major currencies rose 0.456%.
Stock futures rose on Wednesday night after the Dow Jones Industrial Average and S&P 500 turned lower following a Federal Reserve update by chair Jerome Powell, at the conclusion of its two-day meeting.
Futures tied to the Dow rose 128 points, or 0.3%. S&P 500 futures and Nasdaq 100 futures gained 0.5% and 0.8%, respectively.
Some tech shares were higher in extended trading, after continued swings in the regular session. Netflix jumped more than 4% on news that Pershing’s Bill Ackman bought 3.1 million shares. Tesla gained almost 3% following a strong earnings report. Meanwhile, Intel lost 2%, despite strong earnings.
In regular trading, the Dow ended the day down 129 points, after gaining more than 500 points at one point, following the Fed update. The S&P 500 lost 0.2% and the Nasdaq Composite was little changed, with a boost from Microsoft’s post-earnings gain.
Brent crude futures, the international oil benchmark, topped $90 on Wednesday for the first time since 2014, adding to oil’s blistering recovery since its pandemic-era lows in April 2020.
The threshold breakthrough comes amid growing geopolitical tensions between Russia and Ukraine, and as supply remains tight amid a rebound in demand.
The contract added more than 2% at one point to hit a high of $90.47 per barrel for the first time since October 2014. However, Brent pulled back slightly in afternoon trading, ultimately settling 2% higher at $89.96 per barrel.
West Texas Intermediate crude futures, the U.S. oil benchmark, settled 2.04% higher at $87.35 per barrel. During the session the contract hit a high of $87.95, a price last seen in October 2014.
CIBC Private Wealth’s Rebecca Babin said potential sanctions on Russia, which would be triggered by a Ukraine invasion, would be a catalyst for higher crude prices.
Gold extended declines on Wednesday as the dollar and Treasury yields bounced after U.S. Federal Reserve Chairman Jerome Powell signaled a shift away from pandemic-era economic support measures, with the central bank on course for a March interest rate hike.
The pan-European Stoxx 600 provisionally ended up 1.7%, with oil and gas stocks jumping over 4% to lead gains as all sectors and major bourses entered positive territory.
On Wednesday, global investors are focused on the latest policy update from the Fed when its two-day meeting ends