SHANGHAI, May 15 - This is a roundup of global macroeconomic news last Friday night and what is expected today.
The U.S. dollar rose against the euro and sterling on Friday, and notched its biggest weekly gain since February, as investors shifted to safe havens after consumer sentiment data fuelled concern about the U.S. debt ceiling and monetary policy.
A University of Michigan survey on Friday showed May U.S. consumer sentiment slumped to a six-month low on worries that political dispute over raising the federal government’s borrowing cap could trigger a recession. Consumers’ long-term inflation expectations jumped to their highest since 2011. That could influence the Federal Reserve which signalled last week that it could pause its interest-rate hikes.
Recent data showing a slowing economy has boosted the case that the Fed will pause hiking rates at its June meeting. Data also showed U.S. consumer price index inflation cooling to 4.9% year-on-year in April. Moreover, weekly jobless claims rose more than expected.
But the labour market remains tight, with 1.6 job openings for every unemployed person in March, well above the 1.0-1.2 range consistent with a market not generating too much inflation.
Futures traders see a pause in June, and the fed funds falling later in the year. The Fed’s target range stands at 5% to 5.25%, having risen rapidly from 0% since March 2022.
U.S. stock futures fell slightly on Sunday night following back-to-back weekly losses for the Dow Jones Industrial Average and S&P 500.
Dow futures fell by 70 points, or about 0.2%. S&P 500 futures and Nasdaq 100 futures dipped 0.21% and 0.27%, respectively.
The S&P 500 and Dow lost 0.3% and 1.1%, respectively, last week. The Nasdaq Composite, meanwhile, advanced 0.4%. The broader market index fell as poor sentiment around the U.S. economy weighed on investor sentiment.
Wall Street on Friday absorbed a preliminary reading from the University of Michigan last week that showed consumer sentiment falling to a six-month low. Also in focus were debt ceiling negotiations as the U.S. draws nearer to the so-called “X date,” or when the government may go into default without a raise in the debt limit to pay its bills.
On Monday, investors are watching for the May data for the Empire State Index, which will show how New York State manufacturers feel about the economy. Economists polled by Dow Jones are expecting a reading of 1.0, which would be lower than the 10.8 level in previous data. Traders are also anticipating China industrial output and retail sales data.
Oil prices settled more than 1% lower on Friday, falling for the third consecutive week, as the market balanced supply fears against renewed economic concerns in the United States and China.
Brent crude futures settled down 81 cents, or 1.1%, to $74.17 while West Texas Intermediate (WTI) U.S. crude futures fell 83 cents, or 1.2%, to $70.04.
Gold prices fell to a one-week low on Friday, and was lower for the week, weighed down by a stronger dollar and an uptick in U.S. bond yields.
Spot gold was last 0.24% lower at $2,010.84 per ounce, after falling as much as 0.7% earlier in the session.
European stock markets closed higher Friday despite a downbeat week, as investors assessed the state of play across first-quarter earnings and economic data.
The pan-European Stoxx 600 closed 0.4% higher, with banks higher by 0.8% and oil and gas stocks gaining 1.5%. Auto stocks dropped 0.7%.
