Macro Roundup (Jun 14)

SHANGHAI, Jun 14 —This is a roundup of global macroeconomic news last night and what is expected today.

The safe-haven dollar rose to a fresh four-week high against a basket of currencies on Monday, supported by fears of a global economic slowdown and bets on steep interest rate hikes by the U.S. Federal Reserve.

Global financial markets continued to smart from Friday’s hotter-than-expected U.S. inflation data that led to a broad-based drop in risk sentiment and fueled bets on even more aggressive policy tightening.

On Monday, government bonds sold off and stock markets around the globe took a beating.

The U.S. Dollar Currency Index , which tracks the greenback against six other major currencies, was up 0.4% at 104.83, within sight of the 2-decade high of 105.01 touched in mid May.

U.S. stock futures rose on Monday night after the S&P 500 dropped back into bear market territory ahead of the Federal Reserve’s two-day policy meeting this week.

Dow Jones Industrial Average futures rose by 67 points, or 0.2%. S&P 500 and Nasdaq 100 futures climbed 0.3% and about 0.5%, respectively.

Those moves came after intense selling of stocks during the regular session on Wall Street. The S&P 500 slumped 3.9% to its lowest level since March 2021, and falling more than 21% from its January record.

Meanwhile, the Dow tumbled more than 876 points, or 2.8%, which is roughly 17% off its record high. The Nasdaq Composite dropped nearly 4.7%, or more than 33% off its November record.

Oil prices rose on Monday in a session of volatile trade as tight global supplies outweighed worries that demand would be pressured by a flare-up in COVID-19 cases in Beijing and more interest rate hikes.

Brent crude rose 26 cents to settle at $122.27 a barrel. U.S. West Texas Intermediate crude rose 26 cents to settle at $120.93 a barrel. Trade was volatile, with prices down about $3 a barrel earlier.

Oil supplies are tight, with OPEC and allies unable to fully deliver on pledged output increases because of a lack of capacity in many producers, sanctions on Russia and unrest in Libya that has slashed output.

Gold and palladium suffered sharp declines on Monday, as the dollar rallied on bets for steep interest rate hikes by the U.S. Federal Reserve, eroding appeal for bullion and other precious metals.

Spot gold fell 2.2% to $1,829.52 per ounce by 12:05 p.m. EDT (1605 GMT). Gold futures shed 2.4% to $1,829.80.

The dollar index hit a multi-decade peak, becoming the preferred safe-haven at the expense of gold, since rising interest rates reduce appeal for bullion, which pays no interest.

The pan-European Stoxx 600 ended down 2.4%, with travel and leisure stocks dropping around 5.3% to lead losses as all sectors and major bourses slid into negative territory.

The slump in sentiment in Europe on Monday came after the region’s major bourses closed in negative territory last Friday.