SHANGHAI, Jan 4 —This is a roundup of global macroeconomic news last night and what is expected today.
The greenback jumped on Tuesday before the Federal Reserve on Wednesday releases minutes from its December meeting, while the euro was dented by moderating inflation data.
The U.S. central bank slowed its pace of interest rate hikes to 50 basis points last month after delivering four consecutive 75-basis point hikes but stressed the need to hold rates in restrictive territory to bring down inflation.
Investors will watch for signs of how concerned the Fed is about persistent inflation and its thoughts on the labor market, though the meeting minutes may not be as market moving as upcoming jobs and inflation data, said Bipan Rai, North American head of FX strategy at CIBC Capital Markets in Toronto.
A still robust employment picture is viewed as giving the Fed more room to keep raising rates as it battles to bring down stubbornly high inflation. The highly anticipated December jobs report is due on Friday, and consumer price data for last month will be released on Jan. 12.
Fed funds futures traders are pricing for rate cuts this year even as the Fed maintains a hawkish tone, with the fed funds rate expected to peak at 4.98% in June, before falling back to 4.57% by year-end.
Stock futures inched lower in overnight trading Tuesday after Wall Street started 2023 on a sour note.
Futures tied to the Dow Jones Industrial Average slipped 0.04%, or 14 points, while S&P 500 and Nasdaq 100 futures traded flat.
The overnight moves followed a down session for stocks as rising rate concerns, high inflation and recessionary fears crushed hopes that Wall Street could kick off the new year on a positive note.
During regular trading Tuesday, the Nasdaq shed 0.76%, while the Dow Jones Industrial Average and S&P 500 dipped 0.03% and 0.4%, respectively. Shares of Tesla plummeted more than 12% on delivery numbers that missed expectations, while Apple fell 3.7% on reports of production cuts.
Oil prices tumbled in volatile trade on Tuesday, pressured by weak demand data from China, a gloomy economic outlook and a stronger U.S. dollar.
Brent futures for March delivery fell $3.58, or 4.2%, to $82.33 a barrel, the largest daily decline in more than three months.
U.S. crude fell $3.11 to $77.15 per barrel, a 3.9% loss, its biggest fall in more than a month. Both benchmarks had risen $1 a barrel early in the session.
The price of gold notched a six-month high early Tuesday, and analysts believe the rally has further to go in 2023.
Spot gold peaked just below $1,850 per troy ounce before easing off to trade around $1,838 per ounce. U.S. gold futures were up 1% at $1,844.10.
European markets closed higher Tuesday as investors assessed China’s reopening and digested inflation data.
The pan-European Stoxx 600 closed up 1.2%, with almost all sectors in positive territory. Europe’s banking index rose 2.4% to lead gains, while oil and gas stocks bucked the trend to end the session down 0.7%.
