SHANGHAI, Aug 24 —This is a roundup of global macroeconomic news last night and what is expected today.
The dollar pulled back from a fresh two-decade high against the euro on Tuesday after a report showed U.S. private sector activity contracted for a second-straight month in August, raising prospects the Federal Reserve will ease its rate hiking cycle.
The S&P Global flash composite purchasing managers index (PMI) for August dropped to 45 this month, the lowest since February 2021, as demand for services and manufacturing weakened in the face of inflation and tighter financial conditions. A reading below 50 indicates a contraction in activity.
The drop in demand was exactly what the Fed has been trying to achieve with its stiffest run of interest rate increases since the 1980s. The Fed has hiked rates from near zero in March to their current range of 2.25% to 2.50%, with more expected in the months ahead, as it tries to tame inflation, which is running near a 40-year high.
Stock futures were flat in overnight trading Tuesday as investors await more guidance from Federal Reserve Chairman Jerome Powell on the central bank’s tightening path.
Futures on the Dow Jones Industrial Average dipped just 15 points. S&P 500 futures and Nasdaq 100 futures were both little changed.
Both the Dow and the S&P 500 declined for a third straight session Tuesday amid relatively thin trading volumes. The tech-heavy Nasdaq Composite finished Tuesday little changed. The S&P 500 is about flat on the month after rallying more than 9% in July.
The three-day Jackson Hole economic symposium starts Thursday with Powell slated to speak Friday morning. Fed watchers expect him to reinforce the central bank’s goal of squashing inflation and keeping expectations about future prices gains in check.
Oil prices soared more than $3 a barrel on Tuesday after Saudi Arabia floated the idea of OPEC+ output cuts to support prices and with the prospect of a drop in U.S. crude inventories.
The Saudi energy minister said OPEC+ had the means to deal with challenges including cutting production, state news agency SPA said on Monday, citing comments Abdulaziz bin Salman made to Bloomberg.
Global benchmark Brent crude advanced 3.88% to $100.22 a barrel. U.S. West Texas Intermediate crude ended the day $3.38, or 3.7%, higher at $93.74 per barrel.
Gold rose on Tuesday after six straight sessions of losses as the dollar and Treasury yields dropped following weak U.S. business activity data.
Spot gold was last up 0.6% at $1,746.14 per ounce. Prices slipped in the last six sessions and hit $1,727.01 on Monday, the lowest since July 27.
The pan-European Euro Stoxx 600 provisionally ended down 0.5%, despite oil and gas stocks bucking the trend and pushing higher.
