Macro Roundup (Jan 31)

Published: Jan 31, 2023 09:30
The dollar firmed on Monday and distanced itself from an eight-month trough ahead of a slew of central bank meetings this week, including the Federal Reserve’s, with traders keenly focused on guidance for the path of interest rate rises.

SHANGHAI, Jan 31 —This is a roundup of global macroeconomic news last night and what is expected today.

The dollar firmed on Monday and distanced itself from an eight-month trough ahead of a slew of central bank meetings this week, including the Federal Reserve’s, with traders keenly focused on guidance for the path of interest rate rises.

The U.S. dollar index, which measures the greenback against a basket of currencies, rose 0.03% to 101.92, edging away from last week’s eight-month low of 101.50.

However, it remained on track for a fourth straight monthly loss of 1.5%, pressured downward by expectations that the Fed was nearing the end of its rate-hike cycle and that interest rates would not have to rise as high as previously feared.

Sterling was up 0.01% at $1.24005, while the kiwi edged 0.09% higher to $0.6500.

Moves were subdued ahead of policy meetings from the Fed, the European Central Bank (ECB) and the Bank of England (BoE) later this week.

Stock futures rose slightly in overnight trading as the S&P 500 looks to cap off its best January since 2019.

Futures tied to the S&P 500 added 0.26%, while futures connected to the Dow Jones Industrial Average inched 0.15%, or 49 points, higher. Nasdaq-100 futures gained 0.28%.

The overnight moves followed a pause in what’s been a stellar January for stocks. During regular trading the Dow declined 260.99 points, or 0.77%, while the S&P and Nasdaq Composite fell 1.30% and 1.96%, respectively.

Stocks have rallied to start the year after a brutal 2022 — and the worst year for stocks since 2008. As of Monday’s close, the S&P and Dow are up 4.64% and 1.72% in January, respectively, and headed for their third positive month in four. The Nasdaq Composite has risen 8.86% this month, putting it on pace for its best monthly performance since July.

Oil prices dipped 2% on Monday, extending losses as looming increases to interest rates by major central banks weighed on demand and Russian exports remained strong.

Investors expect the U.S. Federal Reserve to raise rates by 25 basis points on Wednesday, followed the day after by half-point increases by the Bank of England and European Central Bank. Any deviation from that script would be a shock.

Brent futures for March delivery fell $1.76, or 2.03%, to $84.90 a barrel. U.S. crude fell $1.78 to $77.90 per barrel, a decline of 2.23% - its steepest decline in nearly four weeks.

Gold prices edged down slightly in choppy trade on Monday as investors looked ahead to the U.S. Federal Reserve policy meeting this week amid expectations of a slowdown in rate hikes.

Spot gold inched 0.2% lower to $1,924.05 per ounce by 1:40 p.m. ET. U.S. gold futures settled down 0.3% to $1,922.9.

European markets closed lower Monday as investors focused on the next U.S. Federal Reserve meeting that begins Tuesday. The two-day meeting will conclude with the central bank’s Federal Open Market Committee announcing its latest interest rate decision.

The pan-European Stoxx 600 index closed down 0.2%, with most sectors in negative territory. The tech sector led losses, down 1.7%, while food and beverage stocks ended 0.7% higher.

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM's internal database model. They are for reference only and do not constitute decision-making recommendations.

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