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Macro Roundup (Jul 29)
Jul 29, 2022 09:30CST
Source:SMM
The dollar pared gains on Thursday after data showed that the U.S. economy contracted again in the second quarter, fueling speculation that the Federal Reserve will not raise rates as high as previously expected.

SHANGHAI, Jul 29 —This is a roundup of global macroeconomic news last night and what is expected today.

The dollar pared gains on Thursday after data showed that the U.S. economy contracted again in the second quarter, fueling speculation that the Federal Reserve will not raise rates as high as previously expected.

Gross domestic product fell at a 0.9% annualized rate last quarter, the Commerce Department said in its advance estimate of GDP on Thursday. Economists polled by Reuters had forecast GDP rebounding at a 0.5% rate.

The second straight quarterly decline in GDP meets the standard definition of a recession. It comes as the Fed aggressively hikes rates in an attempt to choke off soaring inflation.

Stock futures rose on Thursday evening as Wall Street looked to finish the week higher, fueled by strong quarterly reports from key tech companies.

S&P 500 futures climbed 0.5%, while Nasdaq 100 futures added 1%. Futures tied to the Dow Jones Industrial Average were flat.

Futures were supported by gains in extended trading by two of the market’s biggest stocks. Shares of Amazon and Apple moved higher after showing strong sales growth in cloud computing and iPhones, respectively, in their most recent quarters.

The move in futures comes on the heels of a second-straight rally for stocks. The Dow is now up nearly 2% for the week, while the S&P 500 the Nasdaq Composite are up 2.8%.

Those gains have come despite a three-quarters of a percentage point hike from the Federal Reserve on Wednesday and a negative GDP reading on Thursday.

Oil prices were mixed on Thursday, as concerns about a potential global recession that would knock energy demand offset lower crude inventories and a rebound in U.S. gasoline consumption.

Brent crude futures ended the day 52 cents higher at $107.14, after gaining $2.22 on Wednesday.

U.S. West Texas Intermediate crude (WTI) settled 84 cents, or 0.9%, lower at $96.42 a barrel, after rising $2.28 in the previous session.

Gold rose over 1% on Thursday as a contraction in the U.S. economy boosted its safe-haven allure and helped to extend gains driven by a less aggressive tone from the Federal Reserve chairman.

The U.S. economy unexpectedly contracted in the second quarter, with consumer spending growing at its slowest pace in two years and business spending declining, which could fan market fears that the economy was already in recession.

Spot gold extended gains on the data, and was last up 1.22% to $1,755.04 per ounce by 3:55 p.m. EDT, helped along by a subsequent slide in U.S. Treasury yields. U.S. gold futures rose 1.97% to $1,752.90.

The pan-European Stoxx 600 closed up 1% provisionally, with most sectors and major indexes pointing in positive territory. Financial services stocks led the gains, climbing 2.8%.

Macro

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