Macro Roundup (Dec 23)

SHANGHAI, Dec 23 —This is a roundup of global macroeconomic news last night and what is expected today.

The U.S. dollar rose against most major peers on Thursday after U.S. data pointed to labor market strength that could keep the Federal Reserve hawkish for longer.

The number of Americans filing new claims for unemployment benefits increased less than expected last week, pointing to a still-tight labor market, while the economy rebounded faster in the third quarter than previously estimated.

Labor market resilience is keeping the U.S. central bank on its aggressive policy-tightening campaign, with the Fed last week projecting at least an additional 75 basis points of increases in borrowing costs by the end of 2023. It has hiked its policy rate by 425 basis points this year from near zero to a 4.25%-to-4.50% range, the highest since late 2007.

The greenback has so far failed to meaningfully recoup the 3.8% slump that followed Tuesday’s news.

Stock futures were flat in overnight trading Thursday.

Futures tied to the Dow Jones Industrial Average, S&P 500 and Nasdaq 100 futures all traded flat.

The overnight moves followed another down session for markets as December’s selloff resumed and hopes for a Santa Claus rally faded. The Dow tumbled 348.99 points, or 1.05%, but finished well off its 803-point low. The S&P 500 and Nasdaq Composite dove 1.45% and 2.18%, respectively.

Those moves came as concerns of a recession resurged, dashing some investors’ hope for a year-end rally. Investors worry that overtightening from central banks worldwide could force the economy into a downturn.

Oil fell by around $1 a barrel on Thursday in volatile trade as the impact of tighter U.S. crude stocks due to a winter storm in the United States was outweighed by fears that Federal Reserve interest rate hikes and China’s rising COVID-19 cases would dent demand.

Brent crude futures settled at $80.98 a barrel, losing $1.22, while 1.5%. U.S. West Texas Intermediate (WTI) crude futures settled at $77.49, falling by 80 cents, or 1%.

Both benchmarks had risen by $1 a barrel earlier in the session.

Gold turned negative after U.S. economic data showed the country’s economy rebounded faster than previously estimated, boosting the dollar and potentially setting the Federal Reserve on a keener path to fight inflation.

Spot gold shed 1.3% to $1,791.47 per ounce, while U.S. gold futures fell 1.4% to $1,799.4.

European stocks fell Thursday, with investor sentiment souring after solid gains in the previous session.

The Stoxx 600 provisionally closed 1% lower, with all sectors and major bourses in the red. Autos fell furthest, shedding 2.7%, as tech stocks dropped 2.6%.