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Macro Roundup (Dec 1)
2022-12-1
This is a roundup of global macroeconomic news last night and what is expected today.
The dollar dipped on Wednesday after Federal Reserve Chairman Jerome Powell said that the U.S. central bank could scale back the pace of its interest rate hikes “as soon as December,” helping to put the dollar index on track for its worst month since 2010.
Powell said at the Brookings Institution in Washington that “we think that slowing down at this point is a good way to balance the risks.”
Still, Powell cautioned that the fight against inflation was far from over and that key questions remain unanswered, including how high rates will ultimately need to rise and for how long.
Fed funds futures traders are now pricing for the fed funds rates to peak at 4.95% in May, compared with expectations for a top of 5.06% in June that was priced in this morning. The U.S. central bank is expected to hike rates by an additional 50 basis points when it meets on Dec. 13-14.
The dollar index has fallen from a 20-year high of 114.78 on Sept. 28 as investors look toward the U.S. central bank reaching a peak rate early next year with inflation pressures expected to subside and growing concerns about an economic downturn.
Stock futures ticked higher in overnight trading Wednesday.
Futures tied to the Dow Jones Industrial Average added 12 points, or 0.03%, while those tied to the S&P 500 and Nasdaq 100 gained 0.25% and 0.27%, respectively.
The overnight moves followed a sharp rally during regular trading, with the Nasdaq Composite and the S&P snapping three-day losing streaks as Federal Reserve Chair Jerome Powell appeared to confirm a slowdown in the central bank’s tightening — a question that’s lingered in recent weeks.
Oil prices settled up by over $2 per barrel on Wednesday on signs of tighter supply, a weaker dollar and optimism over a Chinese demand recovery.
Capping gains, the OPEC+ decision to hold its Dec. 4 meeting virtually signals little likelihood of a policy change, a source with direct knowledge of the matter told Reuters on Wednesday.
Brent crude futures settled up $2.40, or 2.8% to $85.43 per barrel while U.S. West Texas Intermediate (WTI) crude futures settled up $2.35, or 3.01%, to $80.55.
Gold prices rose over 1% on Wednesday as the non-yielding asset races to end its best month since mid-2020 on slower U.S. rate hike expectations, further reinforced by Federal Reserve Chair Jerome Powell’s comments.
Spot gold rose 1% to $1,767.52 per ounce by 3:03 p.m. ET (2003 GMT). U.S. gold futures settled 0.2% lower at $1,759.9.
The pan-European Stoxx 600 closed up 0.6%, totaling a monthly gain of around 6.1%.
The dollar dipped on Wednesday after Federal Reserve Chairman Jerome Powell said that the U.S. central bank could scale back the pace of its interest rate hikes “as soon as December,” helping to put the dollar index on track for its worst month since 2010.
Powell said at the Brookings Institution in Washington that “we think that slowing down at this point is a good way to balance the risks.”
Still, Powell cautioned that the fight against inflation was far from over and that key questions remain unanswered, including how high rates will ultimately need to rise and for how long.
Fed funds futures traders are now pricing for the fed funds rates to peak at 4.95% in May, compared with expectations for a top of 5.06% in June that was priced in this morning. The U.S. central bank is expected to hike rates by an additional 50 basis points when it meets on Dec. 13-14.
The dollar index has fallen from a 20-year high of 114.78 on Sept. 28 as investors look toward the U.S. central bank reaching a peak rate early next year with inflation pressures expected to subside and growing concerns about an economic downturn.
Stock futures ticked higher in overnight trading Wednesday.
Futures tied to the Dow Jones Industrial Average added 12 points, or 0.03%, while those tied to the S&P 500 and Nasdaq 100 gained 0.25% and 0.27%, respectively.
The overnight moves followed a sharp rally during regular trading, with the Nasdaq Composite and the S&P snapping three-day losing streaks as Federal Reserve Chair Jerome Powell appeared to confirm a slowdown in the central bank’s tightening — a question that’s lingered in recent weeks.
Oil prices settled up by over $2 per barrel on Wednesday on signs of tighter supply, a weaker dollar and optimism over a Chinese demand recovery.
Capping gains, the OPEC+ decision to hold its Dec. 4 meeting virtually signals little likelihood of a policy change, a source with direct knowledge of the matter told Reuters on Wednesday.
Brent crude futures settled up $2.40, or 2.8% to $85.43 per barrel while U.S. West Texas Intermediate (WTI) crude futures settled up $2.35, or 3.01%, to $80.55.
Gold prices rose over 1% on Wednesday as the non-yielding asset races to end its best month since mid-2020 on slower U.S. rate hike expectations, further reinforced by Federal Reserve Chair Jerome Powell’s comments.
Spot gold rose 1% to $1,767.52 per ounce by 3:03 p.m. ET (2003 GMT). U.S. gold futures settled 0.2% lower at $1,759.9.
The pan-European Stoxx 600 closed up 0.6%, totaling a monthly gain of around 6.1%.
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