Macro Roundup (Jul 11)

SHANGHAI, Jul 11 —This is a roundup of global macroeconomic news last Friday and what is expected today.

The U.S. dollar was little changed against a basket of currencies on Friday ahead of the weekend following a choppy session that saw the greenback posting both gains and losses after data showed the world’s largest economy created more jobs than expected in June.

The report cemented expectations of another 75 basis-point hike at the Federal Reserve’s policy meeting later this month. U.S. nonfarm payrolls increased by 372,000 jobs last month, the Labor department reported on Friday.

Economists polled by Reuters had forecast 268,000 jobs added last month. Earlier in the session, the greenback hit a fresh two-decade high against a basket of currencies, led by gains against the euro amid signs the euro zone economy will tip into recession. The dollar has hit consecutive 20-year peaks this week, gaining in five of the last six weeks.

In afternoon trading, the dollar index was flat at 106.96. Fed funds futures priced in a more than 90% chance of a 75-bps rate hike this month, with about 187 bps of cumulative tightening by the end of the year. That was up from 181 bps late Thursday.

U.S. equities futures dipped Sunday evening as Wall Street looked ahead to big company earnings reports and key inflation data, on the heels of a strong employment report.

Futures tied to the Dow Jones Industrial Average slipped by 51 points, or 0.1%. S&P 500 futures fell 0.2% and Nasdaq 100 futures lost 0.4%.

On Friday the Dow and S&P finished trading slightly lower, while the Nasdaq Composite rose for a fifth straight day. All of the major averages secured a winning week after a stronger-than-expected jobs report Friday showed that the economic downturn worrying investors has not yet arrived and added to positive sentiment.

Treasury yields jumped, with the 2-year Treasury yield holding above the 10-year yield, an inversion many see as a recession indicator.

Oil prices rose about 2% in volatile trade on Friday but were still heading for a weekly decline as investors worried about a potential recession-driven demand downturn even as global fuel supplies remained tight.

Brent crude futures rose $2.37, or 2.3%, to settle at $107.02 a barrel. U.S. West Texas Intermediate crude rose $2.06, or 2%, to settle at $104.79 a barrel. Both benchmarks traded in negative territory and then rebounded from session lows.

Brent posted a weekly decline of about 4.1% and WTI a loss of 3.4%, following on from the first monthly decline since November. Prices tumbled on Tuesday, when Brent’s $10.73 drop was the contract’s third-biggest daily fall since it started trading in 1988.

Gold declined for a fourth straight week on Friday, hurt by the dollar’s ascent and as bets for steep interest rate hikes gained traction after healthy U.S. jobs data.

Spot gold was up 0.2% at $1,742.3 per ounce. Bullion has lost 3.29% this week, which would be its worst since mid-May. U.S. gold futures was little changed at $1,740.

Lately, gold has failed to attract safe-haven flows despite growing recessions risks as investors have instead opted for the dollar, which has marched to fresh two-decade highs.

The pan-European Stoxx 600 closed the session almost 0.5% higher, with most sectors in the green. Autos were the top performer of the day, ending up 3.2%, while utilities closed 0.6% lower.