• 03/05/2022 1:23 am

SHANGHAI, Jan 6 (SMM) — This is a roundup of global macroeconomic news last night and what is expected today.

The pound climbed to a two-month high on Wednesday as investors ramped up expectations that the Bank of England will raise interest rates as early as next month after a surprise hike in December.

And growing expectations that Britain will not introduce COVID-19 measures clamping down on economic activity was also boosting the stock market, with the benchmark index rising to its highest in nearly two years.

“Last night’s release of several research papers on Omicron’s milder severity and now this morning talk of Boris Johnson not looking to tighten restrictions after (Christmas) is keeping the pound bid,” Nomura strategist Jordan Rochester said.

Prime Minister Boris Johnson on Tuesday said that England could withstand a surge in COVID-19 infections without shutting down the economy as Britain reported another record daily high in cases fuelled by the Omicron variant.

Against the dollar, the pound edged up for a second consecutive day to $1.3564, its highest since early November.

Stock futures were slightly higher in overnight trading Wednesday after the major U.S. stock averages fell sharply in the first losing regular trading session of the year.

Futures on the Dow Jones Industrial Average added about 65 points, or 0.2%. S&P 500 futures ticked up 0.1% and Nasdaq 100 futures rose 0.1%.

Minutes from the Federal Reserve’s December meeting revealed the central bank discussed reducing its balance sheet in another move to aggressively dial back its pandemic-era easy monetary policy.

The Fed’s plan to reduce the number of Treasurys and mortgage-backed securities it holds comes as it is already tapering its bond purchases and is set to hike interest rates after the taper concludes.

Oil prices rose on Wednesday, extending gains even after OPEC+ producers stuck to an agreed output target rise for February and U.S. fuel inventories surged due to sliding demand as COVID-19 cases spiked.

Brent crude futures rose $1.22, or 1.5%, to $81.22 a barrel as of 12:35 p.m. ET. U.S. West Texas Intermediate (WTI) crude futures rose $1.32, or 1.7%, to $78.31.

U.S. crude stocks dropped by 2.1 million barrels, owing in part to tax incentives for producers to reduce inventories before year-end.

Gold prices edged higher on Wednesday as rising Omicron variant coronavirus cases helped its safe-haven appeal, but trading was range-bound as investors awaited the minutes of the U.S. Federal Reserve’s latest policy meeting as rate hike bets grow.

Spot gold rose 0.1% to $1,817.10 per ounce by 1247 GMT, with U.S. gold futures rising 0.2% to $1,818.50.

European markets are taking a breather after hitting record highs on Tuesday.

In the autos sector, Stellantis shares climbed 3.7% on news of a software tie-up with Amazon.

Investors are closely monitoring interest rates in the bond market.

 

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