Macro Roundup (Mar 21)

SHANGHAI, Mar 21 —This is a roundup of global macroeconomic news last night and what is expected today.

The U.S. dollar headed for its first down week in six versus major peers on Friday, languishing near a one-week low, as investors continued to assess the impact of the start of the Federal Reserve’s rate tightening cycle this week.

The safe-haven greenback also lost traction — while the euro benefited — as traders stayed optimistic for an end to the war in Ukraine as talks continued between Moscow and Kyiv, although progress on Thursday was elusive.

Sentiment also improved after Russia avoided default on dollar-denominated debt.

A phone call between U.S. President Joe Biden and Chinese leader Xi Jinping later on Friday, with the U.S. warning China not to provide support to Russia, added a further layer of geopolitical risk.

U.S. stock futures were steady in overnight trading on Sunday after the S&P 500′s best week since 2020.

Dow futures edged up 15 points. S&P 500 futures rose 0.04% and Nasdaq 100 futures were flat.

Last week, the three major averages notched their best week since November 2020, boosted largely by growth stocks. The S&P 500 surged 6.1% from Monday to Friday. The Dow Jones Industrial Average ended the week 5.5% higher, and the technology-focused Nasdaq Composite spiked 8.1%.

The S&P 500 recouped nearly half of its correction losses last week as investors received highly anticipated clarity from the Federal Reserve, which raised interest rates for the first time since 2018. The central bank signaled it expects to raise rates at its remaining six meetings this year. 

Oil prices were set for a second straight weekly loss, but found a floor above $100 a barrel on Friday after volatile trading this week with no easy replacement for Russian barrels in sight in a market already marked by tight supply.

Brent crude futures advanced 1.21%, or $1.29, to end the day at $107.93 per barrel, after surging nearly 9% on Thursday in the largest percentage gain since mid-2020.

U.S. West Texas Intermediate (WTI) crude futures settled 1.67%, or $1.72, higher at $104.70 per barrel, adding to an 8% jump on Thursday.

Both benchmark contracts were set to end the week down more than 5%, after having traded in a $16 range. Prices hit 14-year highs nearly two weeks ago, encouraging bouts of profit taking since then.

Gold was on track for its biggest weekly drop in nearly four months on Friday, after demand for the safe-haven metal was hit by hopes of progress in peace talks between Russia and Ukraine as well as the fallout from a U.S. interest rate hike.

Spot gold was down 1.14% to $1,920.56 per ounce, weighed down by a stronger dollar. U.S. gold futures settled down 1.2% to $1,919.60.

The pan-European Stoxx 600 provisionally ended 0.7% higher, with most sectors in positive territory and major bourses pointing in opposite directions. The index closed the week up more than 5.2%, registering its best weekly performance since the week through to Nov. 6, 2020.

Little progress has been made so far in talks between Russian and Ukrainian diplomats after a fourth day of dialogue, as Russian forces continue to bombard Ukrainian cities. Commodity prices rallied once again as fears of tighter sanctions and persistent supply problems re-emerged.