Macro Roundup (Apr 7)

SHANGHAI, Apr 7 —This is a roundup of global macroeconomic news last night and what is expected today.

The dollar surged to a nearly two-year high on Wednesday after minutes of the last Federal Reserve meeting reinforced expectations of multiple half percentage-point rate increases to control soaring inflation.

The dollar index, which measures the greenback’s value against six major currencies, climbed to 99.7780, its strongest level since late May 2020. It was last up 0.2% at 99.70.

Fed officials viewed the hefty rate increases as appropriate at future meetings, especially if inflation pressures intensify, minutes showed. They would also have preferred a 50 basic point rise in the target range for the federal funds rate at the March meeting.

Stock futures were flat in overnight trading Wednesday after a two-day losing streak for the major averages as investors digested the Federal Reserve’s plans to tighten monetary policy.

Futures on the Dow Jones Industrial Average dipped 30 points. S&P 500 futures inched 0.1% lower and Nasdaq 100 futures were little changed.

The back-to-back sell-off came as Fed meeting minutes showed that officials planed to reduce their trillions in bond holdings with a consensus amount around $95 billion. Meanwhile, policymakers indicated that one or more 50-basis-point interest rate hikes could be warranted to battle surging inflation.

Oil futures fell on Wednesday following a surprising rise in U.S. crude stocks and after news that large consuming nations would also release oil from reserves in conjunction with the United States to counter supply worries.

Member states of the International Energy Agency (IEA) will release 120 million barrels from strategic reserves, including 60 million from the United States, according to two sources familiar with the matter. That U.S. 60 million commitment is part of Washington’s plans to release a million barrels a day for the next six months for a rough total of 180 million barrels.

Brent crude futures declined 5.22% to $101.07 per barrel. U.S. crude settled 5.6% lower at $96.23 per barrel.

Gold prices held steady after Wednesday’s release of the minutes of the Federal Reserve meeting in March, as the metal’s appeal as a safe haven and inflation hedge offset an expected 50 basis point rate hike by the U.S. central bank.

Spot gold was little changed at $1,923.50 per ounce by 3:08 p.m. ET and U.S. gold futures settled down 0.2% at $1,923.10.

The pan-European Stoxx 600 provisionally ended down 1.6%, with almost all sectors and major bourses sliding into negative territory. Travel and leisure stocks led the losses, down 3.9% for the session, while healthcare stocks bucked the trend to close up 0.2%.