• Fri. Oct 15th, 2021

SHANGHAI, Sep 23 (SMM) — This is a roundup of global macroeconomic news last night and what is expected today.

The U.S. dollar was choppy on the heels of the latest policy announcement by the Federal Reserve on Wednesday, while risk-sensitive currencies such as the Australian dollar and Chinese yuan strengthened after China’s Evergrande said it would make a bond coupon payment.

The Federal Reserve on Wednesday cleared the way to reduce its monthly bond purchases “soon” and signaled interest rate increases may follow more quickly than expected, with half of the 18 U.S. central bank policymakers projecting borrowing costs will need to rise in 2022.

“The tapering of quantitative easing seems very likely now in November but this was something of a given and remains couched in a lot of qualifying criteria in the event that various risks emerge, whether it is the debt ceiling debate, COVID outlook, the China property market intervening,” said Steven Violin, portfolio manager at F.L.Putnam Investment Management Company in Wellesley, Massachusetts.

The dollar index rose 0.094%, alternating between gains and declines after the announcement, with the euro down 0.1% to $1.1711.

U.S. stock index futures were little changed during overnight trading on Wednesday after the Federal Reserve kept benchmark interest rates unchanged, while indicating no immediate intention of removing stimulus policies.

Futures contracts tied to the Dow Jones Industrial Average gained 62 points. S&P 500 futures were up 0.14%, while Nasdaq 100 futures advanced 0.17%.

Stocks finished higher across the board during regular trading following the central bank’s commentary. The Dow gained roughly 340 points, or 1%, for its first positive session in five and best day since July 20. The 30-stock benchmark did close below its highest levels of the day, however, after advancing more than 500 points at one point.

The S&P advanced 0.95%, also snapping a four-day losing streak and registering its best day since July 23. The Nasdaq Composite finished the session 1.02% higher, while the Russell 2000 outperformed on the session, rising 1.48%.

Oil prices climbed more than $1 on Wednesday after U.S. crude stocks fell to their lowest levels in three years as refining activity recovered from recent storms.

Despite recent wobbles from U.S. economic figures, overall demand for fuel has rebounded to pre-pandemic levels. Product supplied over the last four weeks has come in at nearly 21 million barrels per day, not far from 2019′s peak.

U.S. crude inventories last week fell by 3.5 million barrels to 414 million barrels, lowest since October 2018, the U.S. Energy Information Administration said on Wednesday.

“Crude oil prices remain supported as demand recovers around the world and inventories continue to draw,” said Andrew Lipow, president of Lipow Oil Associates in Houston.

U.S. West Texas Intermediate (WTI) crude futures settled $1.74, or 2.47%, higher at $72.23 per barrel.

Brent crude futures climbed $1.54, or 2%, to $75.89 a barrel.

Gold prices slipped in volatile trade on Wednesday after the U.S. Federal Reserve signaled a sooner-than-expected interest rate hike and easing of its bond purchases by the middle of next year.

Spot gold fell 0.4% to $1,767.38 per ounce by 1943 GMT, while U.S. gold futures settled up 0.03% to $1,778.80.

Questions remain over whether embattled Chinese developer Evergrande will pay the interest due on a dollar-denominated bond on Thursday. Hong Kong markets will resume trading today after a holiday on Wednesday.

European stocks closed higher on Wednesday as tensions eased over embattled Chinese property developer Evergrande and global investors awaited the outcome of the latest meeting of the U.S. Federal Reserve.

The pan-European Stoxx 600 index provisionally closed up 1%, with banks leading the gains to rise 3.1% as most sectors and major bourses ended the session in positive territory.

 

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