Macro Roundup (Jul 22)

SHANGHAI, Jul 22 —This is a roundup of global macroeconomic news last night and what is expected today.

The euro jumped against the U.S. dollar before paring gains in a choppy session on Thursday, after the European Central Bank (ECB) delivered a 50 basis point rate hike to tame inflation in its first rate increase since 2011.

The ECB raised its benchmark deposit rate to 0%, breaking its own guidance for a 25 basis point move as it joined global peers in jacking up borrowing costs.

The euro’s initial rally, however, faltered after ECB President Christine Lagarde said the bank was accelerating its exit from negative interest rates but not changing the ultimate point of arrival.

ECB policymakers also agreed to provide extra help for the 19-country currency bloc’s more indebted nations - among them Italy - with a new bond purchase scheme intended to cap the rise in their borrowing costs and so limit financial fragmentation.

The euro was 0.09% higher at $1.0186 after rising as high as 1.0279, its strongest in nearly two weeks.

Meanwhile, the U.S. dollar was down against the Japanese yen at 137.81 yen, after the Bank of Japan stuck as expected to its ultra-easy policy settings, continuing to buck the global monetary tightening trend even as it raised its inflation forecast.

Nasdaq futures fell in overnight trading Thursday as investors digested a fresh batch of corporate earnings and disappointing results from Snap, which sent social media shares reeling.

Futures tied to the Dow Jones Industrial Average slipped 0.15%, or 48 points. S&P 500 futures fell 0.37% and Nasdaq 100 futures tumbled 0.68%.

The Nasdaq finished the regular trading day Thursday 1.36% higher to close at 12,059.61, while the S&P 500 rose 0.99% to 3,998.95. The Dow Jones Industrial Average added 162.06 points, or 0.51%, to settle at 32,036.90. The Dow is on track for a 2.4% weekly gain, while the S&P and Nasdaq are on course to close out the week 3.5% and 5.3% higher.

Oil prices were down about $3 a barrel on Thursday on higher U.S. gasoline stockpiles and after a European Central Bank (ECB) rate hike stoked demand worries, while returning oil supply from Libya and the resumption of Russia’s gas flows to Europe eased supply concerns.

Brent crude futures settled 2.86% lower at $103.86 per barrel. U.S. West Texas Intermediate crude futures ended the day at $96.35, for a loss of 3.5%.

Both were down more than $5 earlier in the session.

U.S. gasoline futures fell 15 cents, or 4.5%, to $3.13 a gallon following a jump of 3.5 million barrels of the commodity in storage last week, U.S. government data showed on Wednesday, far exceeding analyst forecasts.

Gold bounced off a one-year low, gaining over 1% on Thursday, benefiting from some safe-haven interest amid economic concerns as the dollar eased.

Spot gold was up 1.03% at $1,713.69 per ounce after hitting $1,680.25, its lowest since end-March 2021.

U.S. gold futures rose 0.73% to $1,712.30 per ounce.

The pan-European Stoxx 600 closed up by 0.3% provisionally, with financial services shares climbing 2.1% to lead the gains while oil and gas stocks shed 2.1%.