Macro Roundup (Jan 8)

SHANGHAI, Jan 8 (SMM) — This is a roundup of global macroeconomic news last night and what is expected today.

The dollar bounced off its lowest levels since 2018 to its highest in a week on Thursday, its gains attributed partly to safe-haven buying after violence on Capitol Hill and profit-taking by investors who had been betting on the euro.

The dollar index, which measures the U.S. currency against a basket of peers, rose 0.6% to 89.886.

Hundreds of President Donald Trump's supporters stormed the U.S. Capitol on Wednesday in a bid to overturn his election defeat, battling police in the hallways and delaying the certification of Democratic President-elect Joe Biden's victory for hours.

Broader currency markets were largely unperturbed by the scenes of chaos in Washington, though analysts said the dollar’s rise on Thursday indicated some safe-haven buying.

On Wall Street, US stock futures were mostly flat on Thursday evening after another record breaking session on Wall Street.

Futures contracts tied to the Dow Jones Industrial Average rose 26 points, or 0.1%. Those for the S&P 500 and the Nasdaq 100 added 0.2% and 0.1%, respectively.

The move in futures comes after the three major averages set record closing highs, including the Nasdaq Composite, which jumped 2.6% to close above 13,000 for the first time. The Dow and S&P 500 rose 0.7% and 1.5%, respectively.

Investors will get a key piece of economic data on Friday morning when the Labor Department releases its monthly jobs report for December. Economists surveyed by Dow Jones have penciled in a meager gain of 50,000 jobs for the period, but some fear that the report could actually show a net loss of jobs after many areas reinstated economic restrictions to slow the spread of the pandemic.

Oil prices were steady on Thursday after supporters of President Donald Trump stormed the U.S. Capitol, with investors focusing on the likelihood of tighter supplies after Saudi Arabia unilaterally agreed to cut output.

Brent crude was up 8 cents at $54.38 a barrel by 0125 GMT, after gaining 1.3% overnight. U.S. West Texas Intermediate (WTI) gained 11 cents to $50.74, having slipped earlier in the Asian session. The contract rose 1.4% on Wednesday.

Saudi Arabia, the world's biggest oil exporter, said it would voluntarily cut one million barrels per day (bpd) of output in February and March, after OPEC+, which groups the Organization of the Petroleum Exporting Countries and other producers, including Russia, met earlier this week.

“WTI crude seems poised to rise higher as the Biden administration will clamp down on U.S. crude production, the Saudis tentatively alleviated oversupply concerns with their 1-million bpd cut present, and as the dollar’s days seem numbered,” said Edward Moya, senior market analyst at OANDA.

Gold slipped on Thursday weighed down by a stronger dollar and higher U.S. Treasury yields, but prospects of more fiscal stimulus under a Democrat-led administration in Washington capped losses.

Spot gold fell 0.3% to $1,913.87 per ounce. U.S. gold futures settled up 0.3% at $1,913.60.

Prices slipped as much as 2.5% after scaling their highest since Nov. 9 on Wednesday, as 10-year U.S. Treasury yields jumped above 1% for the first time since March.

The higher treasury yields are pulling some “flight to safety money out of the gold market,” said Bob Haberkorn, senior market strategist at RJO Futures. But while the stronger dollar is weighing on gold, the greenback’s upside is likely to be “short lived,” he added.

Here's a look at what's on tap:

Germany: seasonally-adjusted Industrial Production for November, seasonally-unadjusted Current Account for November and seasonally-unadjusted Balance of Trade for November

Euro zone: Unemployment Rate for November

US: Unemployment Rate for December, seasonally-adjusted Nonfarm Payrolls for December and monthly sales of wholesalers for November