SHANGHAI, Mar 22 - This is a roundup of global macroeconomic news last night and what is expected today.
The U.S. dollar edged lower and sterling fell on Tuesday as traders reckoned banking stress would keep the Federal Reserve and the Bank of England from hiking rates much further, or at all, later in the week.
The greenback ticked about 0.51% higher to $1.0774 per euro, while the dollar index, which measures the U.S. currency against six peers, was 0.15% lower at 103.10.
With UK inflation data on Wednesday expected to show some easing and amid the global financial market instability, money markets are now pricing in a 50% chance of no interest rate hike by the BoE on Thursday and the same chance of a 25 basis-point increase.
U.S. stock futures were little changed Tuesday evening as investors braced for the Federal Reserve’s next move in its inflation-fighting rate hiking plan.
Futures tied to the Dow Jones Industrial Average lost 9 points, or 0.03%. S&P 500 futures added 0.01% and Nasdaq 100 futures hovered at the flat line.
In regular trading the major averages rose for a second day. The Dow Jones Industrial Average added 316 points, or nearly 1%. The S&P 500 jumped 1.3%, and the Nasdaq Composite gained 1.58%.
Investors are looking forward to the latest update from the Fed, at the conclusion of its two-day policy meeting on Wednesday. Most investors expect the central bank to stay committed to its tightening and raise rates by 25 basis points.
Oil rose on Tuesday, extending a recovery from a 15-month low hit the previous day, as the rescue of Credit Suisse eased worries about global banking sector risks that could hit economic growth and fuel demand.
Brent crude was up 70 cents, or 0.95%, at $74.49 per barrel. U.S. West Texas Intermediate (WTI) also gained 81 cents, or 1.20%, trading at $68.45.
Gold fell more than 1% on Tuesday as Treasury yields jumped while some traders booked profits after a strong run driven by risk aversion spurred by the banking crisis, as they geared up for the U.S. Federal Reserve’s interest rate decision.
Spot gold dipped 1.3% to $1,952.55 per ounce, while U.S. gold futures were down similarly to $1,956.50.
European markets closed higher on Tuesday as investor nerves settled after UBS’ takeover of rival bank Credit Suisse.
The pan-European Stoxx 600 index closed 1.3% higher, while most sectors closed in the green. Financial services led gains, up 4.4%, as the banking sector climbed 3.8%. Insurance stocks were up 2.9%.
