Macro Roundup (Sep 7)

SHANGHAI, Sep 7 —This is a roundup of global macroeconomic news last night and what is expected today.

The dollar marched higher on Tuesday after a report on the U.S. services industry in August reinforced the view that the economy was not in recession, while the euro and rate-sensitive Japanese yen continued to tumble.

The dollar index rose 0.38% to 110.24 after the Institute for Supply Management said its non-manufacturing PMI edged up to a reading of 56.9 last month from 56.7 in July, the second consecutive monthly increase after three months of declines.

The growth in services followed the ISM’s manufacturing survey last week that showed U.S. factory activity grew steadily in August in contrast to other major economies.

“People recognize the U.S. economy is slowing, but it’s still the least ugly in the contest,” said Marc Chandler, chief market strategist at Bannockburn Global Forex.

While the dollar’s path of least resistance is upward, its strength will be challenged next week when the U.S. Consumer Price Index for August is released, Chandler said.

Stock futures were little changed Tuesday evening after the major averages added to weeks of losses amid a jump in bond yields. 

Futures tied to the Dow Jones Industrial Average were lower by points. S&P 500 futures edged slightly lower by 0.01% and Nasdaq 100 futures hovered just above the flat line.

Stocks added to their three-week slide in regular trading. The Dow fell about 173 points or 0.5%, and the S&P 500 slid 0.4%. The Nasdaq Composite dropped 0.7% to notch its first seven-day losing streak since 2016.

The moves came amid a surge in bond yields that saw the 10-year U.S. Treasury yield jump to its highest level since June. The rate on the 30-year Treasury closed at its highest level since 2014. Bond yields move inversely to prices.

Oil prices fell on Tuesday as concern returned about the prospect of more interest rate hikes and COVID-19 lockdowns weakening fuel demand, reversing a two-day rally on OPEC+’s first output target cut since 2020.

Brent crude settled at $92.83 a barrel, losing $2.91, or 3%. U.S. West Texas Intermediate (WTI) fell from Monday’s trading to settle at $86.88 a barrel, up 1 cent from Friday’s close.

Gold prices on Tuesday slipped from a one-week high hit earlier in the session, as the dollar and Treasury yields climbed amid expectations for aggressive monetary policy tightening by major central banks.

Spot gold was last down 0.56% at $1,700.59 per ounce, after hitting its highest since Aug.30 at $1,726.49 in the Asia trading session.

U.S. gold futures fell 0.64% to $1,711.60.

The pan-European Stoxx 600 ended the day up 0.2%, with the majority of sectors and all major bourses in the black. Retail stocks were the best performing of the day, closing up 1.7%.