Macro Roundup (Oct 20)

SHANGHAI, Oct 20 —This is a roundup of global macroeconomic news last night and what is expected today.

The dollar bounced from two-week lows on Wednesday as benchmark 10-year Treasury yields rose to 14-year highs, while sterling weakened after hotter-than-expected UK consumer price inflation fueled concerns about a deeper recession.

The greenback hit a 32-year peak against the yen, approaching the 150 level at which some traders think the Bank of Japan and Ministry of Finance might intervene.

Treasury yields resumed their march higher as investors maintained expectations that the Federal Reserve will continue to aggressively raise interest rates to bring down soaring inflation, boosting demand for the U.S. currency.

The U.S. central bank is expected to lift rates by another 75 basis points when it meets on November 1-2, with an additional 50 or 75 basis point increase also likely in December.

Nasdaq 100 futures fell on Wednesday night after surging Treasury yields ended a two-day rally for the major averages.

Futures linked to the Dow Jones Industrial Average dipped by 12 points, or 0.04%. S&P 500 futures declined 0.26%, while Nasdaq 100 futures fell 0.49%.

During the regular session Wednesday, the major averages snapped a two-day winning streak, though all three indexes remain on track for a positive week. The Dow declined 99.99 points, or 0.33%. The Nasdaq Composite fell 0.85%, while the S&P 500 slid 0.67%.

Oil prices rose on Wednesday as caution over tightening supply countered the negative impact of uncertain demand, and news that the United States will release more crude from its reserves.

Brent crude futures for December settlement ended up $2.38, or 2.6%, to $92.41 a barrel. U.S. West Texas Intermediate crude (WTI) for November, which is expiring on Thursday, ended at $85.55 a barrel, up $2.73, or 3.3%.

In the previous session, the benchmarks hit a two-week low after U.S. President Joe Biden said he plans to release 15 million barrels of oil from the Strategic Petroleum Reserve (SPR).

Gold prices dropped over 1% to a three-week low on Wednesday as the U.S. dollar and Treasury yields rose, further pressured by prospects of aggressive rate hikes from the Federal Reserve.

Spot gold fell 1.5% to $1,627.81 per ounce, after touching its lowest since Sept. 28 earlier in the session.

U.S. gold futures settled down 1.3% at $1,634.2.

The Stoxx 600 index ended the day down 0.5%, with financial services, construction and food and beverages leading losses.