Macro Roundup (Jul 9)

SHANGHAI, Jul 9 (SMM) — This is a roundup of global macroeconomic news last night and what is expected today.

The dollar fell on Thursday from a three-month high against a basket of peers, with the euro getting a boost as investors unwound bets on risky currencies and as concerns over the spread of COVID variants increased the demand for safe havens.

The greenback was weaker against the euro, the Japanese yen and the Swiss franc, which are generally low-interest rate, stable markets that traders short, using the proceeds to buy riskier assets, said Marvin Loh, senior global markets strategist at State Street.

But with bond yields rising and equity markets tanking, riskier positions in currency markets were sold off, benefiting the euro, as well as the yen and the franc, which are also considered safe-haven currencies.

“When you have this kind of unwind going on, you’ve got strength in those currencies,” said Loh.

The euro held on to earlier gains after the European Central Bank set a new inflation target and claimed a role in fighting climate change after a strategy review, with the single currency last up 0.39% against the dollar, at 1.18365.

The dollar was 0.71% weaker against the yen at 109.825, with the yen having earlier touched 109.535, its strongest since June 11, while the Swiss franc touched 0.9134 versus the greenback, its firmest since June 17.

The dollar index, which measures the greenback against six rivals, was down 0.297% at 92.493 from Wednesday, when it reached 92.844 for the first time since April 5.

On Wall Street, stock futures were flat in overnight trading Thursday after the major indexes fell amid concerns of a slowdown in economic growth.

Futures on the Dow Jones Industrial Average shed 25 points, or 0.07%. S&P 500 futures and Nasdaq futures each dipped 0.10%.

Thursday's losses came as the proliferation of the highly infectious delta Covid variant also fueled worries about the global economic recovery. The Olympics announced a ban of spectators at Tokyo's summer games as Japan declared a state of emergency to curb the spread of coronavirus.

The Dow closed Thursday's regular session 259.86 points, or 0.75%, lower. The S&P 500 dipped 0.86% while the Nasdaq broke a four-day win streak by falling 0.72%.

All three major averages are on track to close lower for the week.

Shares of companies tied to the economic comeback weighed on the market Thursday. Major cruise line, airline and home improvement stocks slumped. Chip stocks also dropped and Big Tech names retreated after gaining in previous sessions.

Oil prices rose on Thursday, rebounding from early losses after U.S. government data showed a much bigger drop than expected in crude and gasoline inventories.

Still, Brent prices remained about $3 a barrel below Monday’s close, as traders remained worried that global crude supplies might swell following the collapse that day of negotiations between the Organization of the Petroleum Exporting Countries and allies including Russia, a group known as OPEC+.

Brent crude oil futures gained 0.94% to settle at $74.12 per barrel, and US West Texas Intermediate futures rose 1.02% to settle at $72.94 per barrel.

Early in the session, both contracts fell to their lowest in about three weeks.

US crude inventories fell by 6.9 million barrels last week to 445.5 million barrels, Energy Information Administration data showed. Analysts had expected a 4 million-barrel drop.

Gasoline stocks fell by 6.1 million barrels in the week to 235.5 million barrels, the EIA said. Analysts had forecast a 2.2 million-barrel drop.​

Gold eased on Thursday as US Treasury yields edged up from their lows while Wall Street also recouped some losses, but a weaker dollar and concerns over a U.S labor market recovery kept bullion near a three-weak peak.

Spot gold fell 0.2% to $1,799.18 per ounce by 2:12 p.m. ET. US gold futures settled 0.1% lower at $1,800.20.

The dollar index fell 0.3% and US 10-year Treasury yields languished near a more than four-month trough, driving gold to a peak since June 17 at $1,818.10 earlier in the session.

Lower yields decrease the opportunity cost of holding non-yielding bullion.

But since then, yields have edged higher from the lows and stocks have pared some losses, weighing on gold, said Phillip Streible, chief market strategist at Blue Line Futures in Chicago.

But gold should remain supported as a safe-haven asset, especially given concerns over a US labor market recovery and the Delta coronavirus variant, Streible added.

Key economic data slated for release today include China's CPI annual rate in June (%), monthly rate of British industrial output in May (%), Britain's seasonally adjusted commodity trade account in May (100 million pounds), China's social financing scale in June-one month (100 million RMB) (July 9-July 15), unemployment rate in Canada in June (%) and final value of monthly wholesale inventory rate in May in the US (%).