Macro Roundup (Mar 3)

SHANGHAI, Mar 3 —This is a roundup of global macroeconomic news last night and what is expected today.

The dollar strengthened on Thursday after unemployment claims pointed to a still strong U.S. jobs market and other data showed growing labor costs, indicating the Federal Reserve has further to go in raising interest rates to tame inflation.

The yield on two-year Treasury notes , which are sensitive to interest rate expectations, shot to levels last seen in July 2007 as the market perceives the Fed will raise rates further to curb rising consumer prices.

Atlanta Fed President Raphael Bostic said on Thursday that the U.S. central bank was ready to keep lifting rates higher if inflation doesn’t slow and was still mulling how recent, stronger-than-anticipated inflation data might shape Fed policy.

The impact of higher rates on the economy may only begin to “bite” in earnest this spring, an argument for the Fed to stick with “steady” quarter-point rate increases, Bostic said.

U.S. stock futures inched downward on Thursday night as investors pondered the Federal Reserve’s rate-hiking path in light of fresh commentary from central bank speakers.

Dow Jones Industrial Average futures fell by 37 points, or 0.11%. S&P 500 and Nasdaq 100 futures dipped 0.15% and 0.21%, respectively.

The major averages are on their way to a positive week. The S&P 500 is up 0.28%, while the Nasdaq has a 0.60% gain. The Dow is up 0.57% on the week.

Oil prices pared early gains on Thursday as signs of a strong economic rebound in top crude importer China were offset by fears over the impact of potential increases to European interest rates.

Brent crude futures were up 33 cents, or 0.41%, at $81.08 a barrel by 3:35 p.m. ET. U.S. West Texas Intermediate (WTI) crude futures were up 32 cents, or 0.41%, at $78.01.

Manufacturing activity in China grew at the fastest pace in more than a decade last month, data showed on Wednesday, adding to evidence of a rebound in the world’s second-largest economy after removal of strict COVID-19 curbs.

Gold prices edged lower on Thursday as the U.S. weekly jobs data hinted at a tight labor market that could keep the Federal Reserve on its rate-hiking cycle, underpinning the dollar and Treasury yields.

Spot gold was down 0.02% at $1,836.39 per ounce by 3:23 p.m. ET, after rising in previous three sessions. U.S. gold futures fell 0.15% to $1,842.7.

European stock markets closed higher Thursday, recovering earlier losses after key euro zone inflation data came in above expectations.

The pan-European Stoxx 600 index provisionally ended up 0.5% after dipping into negative territory during morning deals. Food and beverage stocks led the gains, up 1.8%, while banks slipped 0.8%.