Macro Roundup (Jun 17)

SHANGHAI, Jun 17 —This is a roundup of global macroeconomic news last night and what is expected today.

The Swiss franc soared against the dollar and the euro on Thursday after the Swiss National Bank delivered a surprise interest rate hike, while the British pound rose after the Bank of England delivered a rate hike of its own.

The SNB joined other central banks in tightening monetary policy in its first rate hike in 15 years, increasing its policy rate to -0.25% from the -0.75% it has deployed since 2015.

The move put the Swiss franc on pace for its largest daily jump against the euro since the SNB ditched its currency peg in 2015, with the common currency tumbling 1.9% to 1.019 francs, a 2-month low.

The U.S. dollar tumbled 3.1% against the franc, on pace for its largest 1-day drop in about 6-1/2 years.

Stock futures rose modestly on Thursday evening as Wall Street tries to find its footing after a brutal week of selling.

Futures tied to the Dow Jones Industrial Average gained 65 points, or 0.2%. Those for the S&P 500 added 0.2%, while Nasdaq 100 futures climbed 0.3%.

The moves come as investors are increasingly worried about a potential economic slowdown. Several key pieces of economic data fell short of forecasts this week, ranging from May retail sales to housing starts, and the Federal Reserve raised its benchmark interest rate by the most since since 1994.

Oil prices rose on Thursday in topsy-turvy trading after the United States announced new sanctions on Iran, and as energy markets stayed focused on supply concerns that have sent prices soaring this year.

The market slipped earlier as interest rate hikes in the United States, Britain and Switzerland fed worries about global economic growth.

Brent crude futures settled at $119.81, up $1.30, or 1.1%, while West Texas Intermediate (WTI) crude futures ended up $2.27, or 2%, at $117.58.

Gold rose 1% in volatile trade on Thursday as the dollar pulled back sharply on the U.S. central bank’s aggressive policy outlook, bringing some of the safe-haven lure back to the metal.

Spot gold was last up 0.9% at $1,849.21 per ounce. U.S. gold futures settled up 1.7% at $1,849.90.

Bolstering gold’s appeal among overseas buyers, the dollar fell 1.6% to retreat from recent two-decade highs.

The pan-European Stoxx 600 closed down by 2.5% provisionally, with tech shares plunging 4.7% to lead the losses. A higher interest rate environment is seen as negative for growth-oriented sectors like tech.

Global investors have been reacting to the Federal Reserve’s decision to raise its benchmark funds rate to a range of 1.5% to 1.75% — the highest since just before the Covid pandemic began in March 2020 — in an effort to tame high inflation.