Macro Roundup (Dec 30)

SHANGHAI, Dec 30 (SMM) — This is a roundup of global macroeconomic news last night and what is expected today.

The dollar languished near a 2-1/2-year low on Tuesday as investors were encouraged to take on more risk as U.S. lawmakers pushed forward with an enhanced Covid-19 relief package.

The House of Representatives voted on Monday to increase stimulus payments to qualified Americans to $2,000 from $600, sending the measure on to the Senate for a vote.

Last week’s Brexit agreement, while bare bones, also supported the outlook for global growth, lifting Asian stocks on Tuesday following Wall Street gains.

“Optimism abounds, and it’s generally coming from equity markets,” said Bart Wakabayashi, Tokyo Branch manager of State Street Bank and Trust.

“The dollar is very heavy, and that will continue into next year.”

On Wall Street, US stock index futures were little changed in overnight trading on Tuesday as the market tried to reclaim record highs.

Contracts tied to the Dow Jones Industrial Average slid 12 points. S&P 500 futures declined 0.07%, while Nasdaq 100 futures were down 0.04%.

The move came after the major averages closed lower on Tuesday, giving up early gains that pushed stocks to record highs at the opening bell. Both the Dow and S&P 500 snapped three-day winning streaks, each falling 0.22%. The Nasdaq Composite, meanwhile, slid 0.38%.

The Russell 2000 closed 1.85% lower, for its third straight negative session.

Oil rose on Tuesday as the United States moved toward expanding pandemic aid payments, which could spur fuel demand and which also encouraged investors to take on more risk in hopes of stronger economic growth.

Brent crude climbed 30 cents, or 0.6%, to $51.16 a barrel, and U.S. West Texas Intermediate (WTI) crude futures settled 38 cents, or 0.8%, higher at $48.

“We are seeing strength in the oil market on the back of progress with the U.S. stimulus package,” said Gary Cunningham, director of market research at Tradition Energy.

The Democratic-led U.S. House of Representatives voted to meet President Donald Trump’s demand for $2,000 COVID-19 relief checks on Monday.

The Republican-controlled Senate will still need to vote on the measure.

Global shares rose for a fourth straight session on Tuesday on the U.S. stimulus hopes.

Still, concerns over coronavirus lockdowns capped gains in the short-term.

Gold prices rose on Tuesday as the dollar weakened after the approval of larger coronavirus relief checks by Democratic-led U.S. House of Representatives, while improved risk appetite kept it below last session’s one-week high.

Spot gold rose 0.4% to $1,877.75 per ounce. The metal climbed as much 1.3% on Monday after U.S. President Donald Trump’s approval of a $2.3 trillion stimulus package.

U.S. gold futures climbed 0.1% to $1,882.80.

“Gold is trading technically as well with underlying support coming from the weaker dollar driven by the prospect potentially of an even bigger check being distributed to U.S. consumers,” said Saxo Bank analyst Ole Hansen.

“We are entering 2021 with some nervousness as we got stock markets at elevated levels and (on) prospects of additional stimulus against the prospect of vaccine starting to improve the economic outlook... but overall it hasn’t reduced the appetite for safe-haven metals.”

Initial value of monthly rate of US Wholesale Inventories for November, seasonally-adjusted monthly rate of US Pending Home Sales Index for November, US EIA Crude Oil Stocks Change as of December 25 and US Chicago Purchasing Managers Index (PMI) for December will be released today.