Macro Roundup (Jun 13)

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

The dollar climbed to a near four-week high against a basket of currencies on Friday, after data showed U.S. consumer prices accelerated in May, strengthening expectations the Federal Reserve may have to continue with interest rate hikes through September to combat inflation.

In the 12 months through May, the CPI increased 8.6% after rising 8.3% in April. Economists had hoped that the annual CPI rate peaked in April

The inflation report was published ahead of an anticipated second 50 basis points rate hike from the Fed next Wednesday. The U.S. central bank is expected to raise its policy interest rate by an additional half a percentage point in July. It has hiked the overnight rate by 75 basis points since March.

U.S. stock futures fell Sunday night as Wall Street tries to recover from one of its worst weeks of 2022.

Futures tied to the Dow Jones Industrial Average dropped 176 points, or 0.6%, while S&P 500 futures slid 0.95%. Nasdaq 100 futures pulled back by 1.5%.

The major averages last week posted their biggest weekly declines since late January. The Dow and S&P 500 fell 4.6% and 5.1%, respectively, while the Nasdaq Composite lost 5.6%.

A chunk of those losses came Friday, when hotter-than-expected U.S. inflation data spooked investors. The Dow dropped 880 points, or 2.7%. The S&P 500 and Nasdaq lost 2.9% and 3.5%, respectively.

Oil prices sank on Friday, after U.S. consumer prices rose more than expected and China imposed new Covid-19 lockdown measures.

Brent crude fell $1.19, or 1%, to $121.88 a barrel. U.S. West Texas Intermediate crude fell $1, or 0.8%, to $120.34 a barrel.

Oil prices sank along with Wall Street stocks after news that U.S. consumer prices accelerated in May. Gasoline prices have hit a record high and the cost of food has soared, leading to the largest annual increase in about 40 years. That raises expectations that the Federal Reserve will tighten policy more aggressively.

Gold prices bounced back in volatile trading on Friday, as focus turned to economic risks after elevated U.S. inflation readings bolstered bets for aggressive interest rate hikes.

Spot gold rose 1.4% to $1,873.58 per ounce by 2:40 p.m. EDT.

U.S. gold futures settled up 1.2% at $1,875.50.

The pan-European Stoxx 600 ended the day down 2.7%, with banks shedding 4.9% to lead losses as all sectors and major bourses closed in negative territory.

The ECB on Thursday confirmed its intention to hike interest rates by 25 basis points at its July meeting, with a further hike expected in September, the scale of which will be determined by the medium-term inflation outlook.

The central bank also raised its inflation expectations for the euro zone significantly and downgraded its growth forecasts.