SHANGHAI, Aug 25 —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.
Against a basket of six major currencies, the dollar index was down 0.37% to 108.62, after earlier touching its highest level since mid-July.
U.S. stock futures were flat on Wednesday night after all three major averages ended higher during the daily trading session.
Dow Jones Industrial Average futures shed 7 points, or 0.02%. S&P 500 and Nasdaq 100 futures climbed 0.11% and 0.09%, respectively. Shares of Nvidia slid more than 2% on the heels of a quarterly report that missed Wall Street’s expectations. Salesforce fell more than 4% after the company provided a disappointing forecast for fiscal 2023. Snowflake jumped 16% after posting a beat on revenue.
The Dow Jones Industrial Average gained 59.64 points, or 0.18%, and the S&P 500 rose 0.29% Wednesday. For both averages, the gains snapped three-day long losing streaks. The tech-heavy Nasdaq Composite also ticked up 0.41%.
The market action occurs as investors await the start of the Jackson Hole economic symposium, which begins Thursday with Federal Reserve Chair Jerome Powell scheduled to speak the following morning. Traders will be listening for more information about how the central bank will combat high inflation and if policymakers may cut rates when the current hiking cycle is over.
Oil prices ended Wednesday higher after a volatile trading session on concerns that the United States will not consider additional concessions to Iran in its response to a draft agreement that would restore Tehran’s nuclear deal - and potentially the OPEC member’s crude exports.
Iran said it had received a response from the United States to the EU’s “final” text for revival of Tehran’s 2015 nuclear deal with major powers.
Gold steadied on Wednesday as the dollar gave up some gains from earlier in the session, while investors await the Jackson Hole central bankers’ event for clues on rate hikes.
Spot gold was up 0.24% at $1,751.85 per ounce by 4:00 p.m. ET. It rose as much as 1% in the previous session.
The pan-European Stoxx 600 index provisionally ended up 0.2%, with major bourses and sectors pointing in opposite directions. Household goods added 1.2% to lead gains, while mining stocks fell 1.8%.
