SHANGHAI, May 18 - This is a roundup of global macroeconomic news last night and what is expected today.
The U.S. dollar rose to a seven-week high on Wednesday, boosted by optimism about a deal to extend the debt ceiling and avert a U.S. default and amid a round of solid economic data that suggests rate cuts from the Federal Reserve could come later rather than sooner.
In afternoon trading, the dollar rose 0.9% versus the yen to 137.59 yen, after earlier climbing to a two-week peak of 137.625. In the offshore market, the dollar rose 0.1% against the yuan to 7.0077.
After a months-long standoff, both political leaders agreed to negotiate a deal directly. An agreement needs to be passed by both chambers of Congress before the federal government runs out of money to pay bills, as soon as June 1.
U.S. data, meanwhile, has been on the whole positive, despite some pockets of slowdown, backing the view that interest rates will remain higher for longer.
Wednesday’s data showed U.S. single-family homebuilding increased in April, although data for the prior month was revised sharply lower.
U.S. industrial production also gained, advancing 1% last month, easily topping expectations and up slightly from the March reading.
U.S. stock futures were flat on Wednesday night as Wall Street hoped that the debt ceiling crisis would soon see a resolution.
Dow Jones Industrial Average futures slipped by 28 points, or 0.08%. Futures linked to the S&P 500 and Nasdaq 100 futures declined by 0.05% and 0.02%, respectively.
The major averages all ended Wednesday’s regular session higher. The Dow gained more than 400 points. The S&P 500 rose 1.19%, and the Nasdaq Composite advanced 1.28%. A rebound in regional bank shares also contributed to Wednesday’s rally. The SPDR S&P Regional Bank ETF (KRE) jumped more than 7%, while Western Alliance shares surged more than 10%.
Investors’ sentiment seemed to rise after Washington leaders indicated that they are moving forward on debt ceiling talks. President Joe Biden also stated in later remarks that he was confident lawmakers would come together to reach a deal and avoid a default.
Investors will be looking toward retail giant Walmart’s earnings report Thursday morning for insights on the health of the consumer. China-based tech giant Alibaba is also set to report earnings before the bell.
Wall Street will also watch out for the weekly jobless claims numbers to gauge the strength of the labor market. The Philadelphia Fed’s manufacturing survey numbers for May, as well as existing home sales data for April, are also slated to be released Thursday morning.
Oil prices settled up about $2 on Wednesday as optimism over oil demand and U.S. debt ceiling negotiations outweighed worries about abundant supply.
Brent crude futures settled up $2.05, or 2.7%, to $76.96 a barrel. West Texas Intermediate U.S. crude settled up $1.97 or 2.8% to $72.83.
Gold retreated on Wednesday as the dollar advanced after hawkish comments from U.S. Federal Reserve officials raised doubts over interest-rate cuts this year.
Spot gold dropped 0.3% to $1,981.39 per ounce after touching its lowest since April 27. U.S. gold futures settled down 0.4% at $1,984.90.
European markets were mixed on Wednesday, as investors kept an eye on U.S. debt ceiling negotiations.
The pan-European Stoxx 600 index closed 0.15% lower despite morning gains in U.S. stocks, following signs of progress in the talks. Germany’s DAX posted a 0.3% increase, while the U.K.’s FTSE 100 was down 0.4%.
