Macro Roundup (Apr 19)

SHANGHAI, Apr 19 —This is a roundup of global macroeconomic news last night and what is expected today.

The dollar rose to a fresh two-year high on Monday in thin and choppy trading, in line with higher U.S. Treasury yields, as investors braced for multiple half a percentage-point rate hikes from the Federal Reserve.

Volume was light on the day with Hong Kong, European, Australian and New Zealand markets closed for Easter Monday.

The U.S. rate futures market has priced in a 96% chance of a 50 basis-point tightening at next month’s Fed policy meeting, and about 215 basis points in cumulative rate increases in 2022, providing ample support for the dollar.

The greenback also climbed to a new 20-year peak of 126.98 yen versus the Japanese currency, highlighting the contrast in monetary policy between a hawkish Fed and an ultra-dovish Bank of Japan.

The benchmark U.S. 10-year Treasury yield, meanwhile, touched a three-year high of 2.884%.

Stock futures rose on Monday evening as traders navigate one of the busiest weeks of corporate earnings season.

Futures tied to the Dow Jones Industrial Average added 98 points, or 0.3%, while those for the S&P 500 climbed 0.4%. Nasdaq 100 futures gained 0.5%.

The move in futures comes after a slightly down day for stocks. The Dow and Nasdaq Composite each dipped 0.1%, while the S&P 500 inched lower by 0.02%.

Oil rose on Monday in choppy trade, with Brent crude topping $113 a barrel, as outages in Libya deepened concern over tight global supply amid the Ukraine crisis, offsetting worries over slowing Chinese demand.

Adding to supply pressures from sanctions on Russia, Libya’s National Oil Corp on Monday warned “a painful wave of closures” had begun hitting its facilities and declared force majeure at Al-Sharara oilfield and other sites.

Brent crude, the global benchmark, rose $1.24 to $112.94 a barrel. Earlier in the session, the contract rose to $113.80 a barrel, its highest since March 30.

U.S. West Texas Intermediate rose 85 cents to $107.80 a barrel. The benchmark hit $108.65 a barrel, also the highest since March 30.

Gold rose to a one-month high on Monday, just shy of the $2,000 an ounce level, as concerns around the Russia-Ukraine conflict and rising inflationary pressures increased safe-haven bids for the precious metal.

Spot gold rose 0.1% to $1,976.56 per ounce by 2:09 p.m. ET, after earlier hitting its highest since March 11 at $1,998.10. U.S. gold futures settled 0.6% higher at $1,986.4.

Gold’s advance was curbed late in the session by a jump in benchmark 10-year U.S. Treasury yields and further gains in the dollar, which dulls the appetite for gold among overseas buyers.

The pan-European Stoxx 600 provisionally ended up 0.68%, with travel and leisure stocks gaining 3.19% while technology dropped 0.46%.

The ECB kept its monetary policy unchanged but confirmed it will end its bond buying in the third quarter. Once the bond buying program is completed, the ECB is expected to begin hiking interest rates, following the same path as the Bank of England and the U.S. Federal Reserve.