Macro Roundup (Mar 27)

27 Mar, 2023

This is a roundup of global macroeconomic news last Friday night and what is expected today.

The US dollar index rose 0.6% at 103.09, with the euro down 0.6% to $1.0762.

The euro and sterling fell sharply against a strengthening dollar on Friday amid nervousness over banks, with better-than expected economic data failing to lift sentiment.

Banking stocks plunged in Europe with heavyweights Deutsche Bank and UBS Group pummelled by worries that the worst problems to hit the sector since the 2008 financial crisis have not yet been contained.

Better-than-expected flash Purchasing Managers’ Index (PMI) data failed to lift the single currency as sentiment in markets were fragile with European banks falling more than 3%.

Stock futures edged higher Sunday evening as Wall Street came off a winning week and investors continued to follow the troubling bank sector.

Futures tied to the Dow Jones Industrial Average added 132 points, or 0.4%. S&P 500 futures gained 0.5%, while Nasdaq-100 futures advanced 0.4%.

The moves come after Wall Street capped off a winning week despite volatility related to the Federal Reserve’s latest interest rate hike and the ongoing bank crisis. The Nasdaq Composite led the major indexes upward with a 1.7?vance. The S&P 500 finished the week up 1.4%, while the Dow added 1.2%.

Oil prices fell Friday amid declining European banking shares and after U.S. Energy Secretary Jennifer Granholm said refilling the country’s Strategic Petroleum Reserve (SPR) may take several years, dampening demand prospects.

Brent crude fell 95 cents, or 1.3%, to $74.96 a barrel, while West Texas Intermediate U.S. crude futures fell 74 cents, or 1.1%, to $69.22 a barrel.

Both benchmarks, which fell over 4?rlier in the session, were on track to end the week higher, after posting their biggest weekly declines in months last week due to banking sector turmoil and worries about a possible recession.

Gold prices ended a volatile week higher on Friday as bank contagion fears bolstered both safe-haven demand and bets on a pause in Federal Reserve rate hikes, adding to the appeal of zero-yield bullion.

U.S. gold futures lost 0.6% to settle at $1,983.80 per ounce. Futures also gained 0.5% for the week, having climbed to its highest level in a year above $2,000 on Monday.

European stock markets closed lower on Friday as investors took stock of a week of central bank rate hikes and the latest news from the banking sector.

The pan-European Stoxx 600 index closed 1.4% lower, with nearly all sectors posting declines.