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Macro Roundup (May 13)

iconMay 13, 2022 09:30
Source:SMM
The dollar was lower on Wednesday after economic data showed inflation remained high but was unlikely to lead the Federal Reserve to shift to a more aggressive path of monetary policy.

SHANGHAI, May 13 —This is a roundup of global macroeconomic news last night and what is expected today.

The dollar was lower on Wednesday after economic data showed inflation remained high but was unlikely to lead the Federal Reserve to shift to a more aggressive path of monetary policy.

The consumer price index rose 0.3% last month, the smallest gain since August, the Labor Department said on Wednesday, versus the 1.2% month-to-month surge in the CPI in March, the largest advance since September 2005.

On an annual basis, CPI climbed 8.3%, higher than the 8.1% estimate but below 8.5% the prior month.

The data signaled inflation may have peaked but was unlikely to quickly cool and derail the Fed’s current plans to tighten monetary policy.

The dollar index , which had touched a four-session low of 103.37 ahead of the report, immediately strengthened to a session high of 104.13 following the data, just below the two-decade high of 104.19 reached on Monday.

Stock futures were little changed on Thursday evening as investors geared up for the S&P 500 to potentially slide into official bear market territory.

Futures tied to the Dow Jones Industrial Average shed 9 points, or less than 0.1%. S&P 500 futures and Nasdaq-100 futures were marginally higher.

On Wednesday, the S&P 500 and Dow bounced off their intraday lows but still fell 0.1% and 0.3%, respectively. The S&P closed down more than 18% from its all-time high, and will be in an official bear market if that loss deepens to 20%. The Dow has declined for six straight trading sessions.

The Nasdaq squeaked out a gain of less than 0.1% on Wednesday, but the tech-heavy index is already in a bear market, down more than 29% from its all-time high.

Oil prices rose on Thursday, reversing earlier losses, as supply concerns and geopolitical tension in Europe got the upper hand over the economic fears dogging financial markets as inflation soars.

Brent crude fell 6 cents to $107.45. WTI ended the day 0.4% higher at $106.13.

A pending European Union ban on oil from Russia, a key supplier of crude and fuels to the bloc, is anticipated to further tighten global supplies.

Gold and other precious metals dropped on Thursday, with palladium shedding more than 8%, as investors flocked to the dollar driven by bets the U.S. Federal Reserve will stick to aggressive rate hikes.

Spot gold fell 1.5% to $1,823.79 per ounce by 4 p.m. ET. U.S. gold futures were down 1.7% at $1,823.

Rival safe-haven dollar climbed to fresh 20-year highs – making gold less appealing for other currency holders driven by concerns that tighter monetary policies to tame surging inflation will hurt the global economy.

The pan-European Stoxx 600 index closed down by 0.6%, paring sharp losses at the open. Basic resources dropped 3% as almost all sectors and major bourses finished in negative territory.

Global investors digested the April inflation reading from the U.S., which showed the consumer price index surged 8.3% in April as compared with a year ago. The inflation rate was higher than expected and still running close to a 40-year high of 8.5%. The reading has sparked concerns that a path of aggressive rate hiking lies ahead.

Macro

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