Macro Roundup (Apr 20)

SHANGHAI, Apr 20 —This is a roundup of global macroeconomic news last night and what is expected today.

The dollar rose on Tuesday to a fresh 20-year high against the Japanese yen and tested a two-year peak against the euro, supported by high U.S. Treasury yields.

Ten-year U.S. inflation-linked bond yields are within touching distance of turning positive for the first time in two years.

The dollar index, which measures the greenback against six other currencies, climbed past 101 for the first time in more than two years. It settled at 100.98.

The dollar’s gains have been most striking against the yen, climbing to its highest level against the Japanese currency since May 2002. It was last up 1.49% at 128.86 yen.

The euro recovered some grounds, trading 0.06% higher against the dollar at $1.0787, but stayed just off last week’s two-year low of $1.0756.

Stock futures dipped in overnight trading as investors digested disappointing Netflix earnings and looked ahead to a new batch of companies set to report Wednesday.

Futures on the Dow Jones Industrial Average fell 40 points. or 0.12%. S&P 500 futures dipped 0.4% and Nasdaq 100 futures sank 0.9%.

All the major averages saw strong gains during regular trading, posting their best day since March 16. The Nasdaq Composite bounced back 2.15%, while the Dow Jones Industrial Average rose 499.51 points, or 1.45% and the S&P 500 gained 1.61%.

Oil prices tumbled 5% in volatile trading on Tuesday on demand concerns after the International Monetary Fund (IMF) reduced its economic growth forecasts and warned of higher inflation.

Prices fell despite lower output from OPEC+, which produced 1.45 million barrels per day (bpd) below its targets in March, as Russian output began to decline following sanctions imposed by the West, according to a report from the producer alliance seen by Reuters.

Russia produced about 300,000 bpd below its target in March at 10.018 million bpd, based on secondary sources, the report showed.

Brent crude declined 5.22% to $107.25, while U.S. West Texas Intermediate crude settled 5.2% lower at $102.56 per barrel.

Gold eased on Tuesday after having touched a resistance at the $2,000 per-ounce level in the previous session, as the dollar rose to a two-year high and dented bullion’s appeal.

Spot gold was down 1.52%% at $1,948.46 per ounce, while U.S. gold futures slipped 1.8% to $1,950.7.

The dollar firmed to its highest since April 2020 as investors braced for multiple half a percentage-point rate hikes from the Federal Reserve as it seeks to rein in soaring inflation.

The pan-European Stoxx 600 slid 0.7% by the end of trade, with the insurance sector leading the losses and energy stocks eking out some slim gains.

In terms of individual share price movement, Swiss technology company Temenos gained 7% while at the bottom of the European blue chip index, Swiss Re fell 7.6%.