Macro Roundup (Mar 3)

SHANGHAI, Mar 3 —This is a roundup of global macroeconomic news last night and what is expected today.

The US dollar edged higher against the euro on Wednesday, as investors worried about the impact of an escalating conflict in Ukraine on the euro zone’s economic prospects, while commodity-linked currencies strengthened.

The Russian ruble extended its recent slide to hit record lows in Moscow trade as stinging Western sanctions over Moscow’s invasion of Ukraine pummeled Russia’s financial system.

US stock index futures were modestly lower during overnight trading Wednesday, after the major averages finished the day higher despite escalating tensions between Russia and Ukraine.

Futures contracts tied to the Dow Jones Industrial Average declined 28 points. S&P 500 futures shed 0.11%, while Nasdaq 100 futures dipped 0.2%.

During regular trading on Wednesday the Dow advanced nearly 600 points, or 1.79%, snapping a two-day losing streak. The S&P 500 gained 1.86%, while the Nasdaq Composite added 1.62%. It was the tech-heavy index’s fourth positive session in the last five.

Wednesday’s rally was broad based, with all eleven S&P 500 sectors advancing. Visa was the sole Dow component to decline, with the other 29 stocks in the benchmark index finishing the day in the green. Caterpillar was the top gainer, rising more than 5%.

Markets have been volatile in recent sessions as investors assess risks to the U.S. economy fueled by Russia’s war in Ukraine.

US oil climbed to the highest level in more than a decade in Wednesday trade, with global benchmark Brent topping $113 per barrel after OPEC and its oil-producing allies, which includes Russia, decided to hold production steady.

The oil market was already tight prior to Russia’s invasion of Ukraine, and with countries now shunning oil from key producer Russia, traders are worried that supply shortfalls will follow.

West Texas Intermediate crude futures, the U.S. oil benchmark, jumped more than 8% to trade at $112.51 per barrel, the highest level since May 2011. Global benchmark Brent crude rose more than 8% to $113.94 per barrel, the highest level since June 2014.

Prices later moved off their highs. WTI settled the day 6.95% higher at $110.60 per barrel, while Brent advanced 7.58% to $112.93. During trading Tuesday WTI gained 8.03% to settle at $103.41 per barrel, while Brent advanced 7.15% to $104.97.

OPEC and its allies said Wednesday that they will increase output in April by 400,000 barrels per day above March’s level, despite the blistering rally in oil that has pushed prices well above $100.

Gold slipped on Wednesday due to an uptick in risk appetite and U.S. bond yields, while concerns over a supply crunch that may follow sanctions on Russia kept the price of auto-catalyst metal palladium near a seven-month peak.

Spot gold was down 1.1% at $1,921.56 per ounce by 02:01 p.m. EST (1901 GMT).

U.S. gold futures settled 1.1% lower at $1,922.30.

The pan-European Stoxx 600 provisionally ended up around 1.1% after dropping 0.9% at the open. Oil and gas stocks led the gains, up over 4% on surging crude prices.

The choppy trade in Europe came after a mixed close in Asia-Pacific markets, with shares in the region dented by concerns over the ongoing Russia-Ukraine conflict.

The war between the neighboring countries in Europe is leading to a surge in oil prices, with international benchmark Brent crude futures jumping to their highest level in seven years. U.S. crude futures also saw big gains, rising around 3% to $106.63 per barrel.

That’s despite the the International Energy Agency saying Tuesday it will release 60 million barrels of oil from global reserves, in a bid to ease the current supply constraint.