Macro Roundup (Mar 14)

SHANGHAI, Mar 14 —This is a roundup of global macroeconomic news last Friday night and what is expected today.

Sterling slipped to a 16-month low on Friday against the safe-haven U.S. dollar and was heading for its third consecutive weekly decline as stronger-than-expected UK economic growth did little to support the pound.

The Office for National Statistics said Britain’s economy grew 0.8% in January, the strongest monthly expansion since June and more than forecast by any economist in a Reuters poll, which had pointed to growth of 0.2%.

Stronger than expected data from the UK did little to support the pound with the economic outlook appearing increasingly uncertain due to Russia’s invasion of Ukraine.

Stock futures rose in overnight trading Sunday ahead of an important week as the Russia-Ukraine war continues to escalate and the Federal Reserve could hike rates for the first time since 2018.

Futures on the Dow Jones Industrial Average gained 150 points. S&P 500 futures climbed 0.5% and Nasdaq 100 futures traded 0.6% higher.

Fighting has intensified around Ukraine’s capital, Kyiv, while Russian forces bombard cities across the country, killing civilians who are unable to escape. The financial fallout of stiff Russian sanctions will come into sharper focus in the coming days ahead of a scheduled sovereign bond payment.

Meanwhile, the Fed is expected to raise its target fed funds rate by a quarter percentage point from zero at the end of its two-day meeting Wednesday. Investors are also looking to the central bank for its new forecasts for rates, inflation and the economy, given the uncertainty from the escalated geopolitical tensions.

Oil prices settled higher on Friday but posted their steepest weekly decline since November, as traders assessed potential improvements to the supply outlook that has been disrupted by Russia’s invasion of Ukraine.

Crude prices have soared since the invasion, which Moscow calls a “special military operation.” This week, futures benchmarks hit their highest levels since 2008, then pulled back sharply as some producing countries signalled they may boost supply.

On Friday, supply concerns grew when talks to revive the 2015 Iran nuclear deal faced the threat of collapse after a last-minute Russian demand forced world powers to pause negotiations.

Brent crude futures rose $3.34, or 3.1%, on Friday, settling at $112.67 a barrel, after hitting a session low of $107.13. U.S. West Texas Intermediate (WTI) crude futures rose $3.31, or 3.1%, to settle at $109.33 a barrel, off the session low of $104.48.

Gold eased on Friday, consolidating at the end of a volatile week as investors sized up potential rate hikes from the U.S. Federal Reserve, but analysts warned an escalation in Ukraine could spur further safe-haven demand.

Spot gold was down 0.3% at $1,991.20 per ounce by 1050 GMT, but remained poised for a weekly rise of about 1.2%. U.S. gold futures were down 0.1% at $1,997.70.

The pan-European Stoxx 600 added 1.08% by the close, with travel and leisure stocks climbing 3.5% to lead gains as most sectors and major bourses closed in positive territory.

Russian President Vladimir Putin said Friday “certain positive shifts” have occurred in the talks between the Kremlin and Ukraine. Meanwhile, President Volodymyr Zelenskyy reportedly said Ukraine has reached a “strategic turning point” in its war with Russia.