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US Stocks and Futures Steady Ahead of Fed Minutes: Markets Wrap

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(Bloomberg) — European stocks and US stock futures were flat as investors await the release of policy minutes from the latest Federal Reserve meeting for insights on the path of interest rate hikes.

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The Stoxx Europe 600 index held near a three-month high, as basic resources and energy stocks rose. Credit Suisse Group AG shares fell after being warned of a fourth-quarter loss. Contracts on the S&P 500 rose after the underlying gauge closed at its highest level since mid-September on Tuesday. Nasdaq 100 futures have changed little.

Shares in Manchester United Plc jumped in US pre-sale trading after the owners of the historic English football club said they were exploring options that could lead to a sale. The Asian stock index rose. Market volumes are expected to be less intense, given the Thanksgiving holiday in the US on Thursday.

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A measure of dollar strength pared declines, with the New Zealand currency among the strongest performers against the greenback after the country’s central bank raised interest rates by the largest amount ever. Ten-year US Treasury yields fell by 1 basis point.

The publication of the minutes of the Fed meeting on November 1-2 – scheduled for 2pm in Washington – will be studied to see how the Fed’s Fed policymakers were above a higher peak in interest rates than previously indicated in their battle against inflation. Some investors are speculating that lower-than-expected inflation figures may prompt the Fed to ease up on rate hikes as early as next month’s meeting.

“Since the meeting, the market has swung in its anticipation of what might happen in December, and this week’s minutes may help confirm the Fed’s intent,” said economists at the Rand Merchant Bank in Johannesburg. “The risk to markets from the minutes is that they look less hawkish than expected, which could throw off some of the rate hike risk re-pricings we saw at the end of last week.”

European investors digested data showing that private sector activity in Germany and France – the eurozone’s two largest economies – contracted in November, painting a bleak picture for a region that may already be in recession.

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Meanwhile, a measure of eurozone activity in manufacturing and services rose unexpectedly in November, suggesting that businesses are seeing tentative signs that the region’s economic slowdown may be abating as record inflation eases and prospects for future output improve.

In Asian trading, technology shares swung in Hong Kong before consolidating their lead as investors weighed the fallout from a report that Ant Group Co. She faces a fine of more than $1 billion from China’s central bank. The news has fueled speculation that this could mark a potential end point for government crackdowns on the technology and could allow Alibaba Group Holdings Limited to revive efforts to list Ant shares.

Bitcoin held on to its recent gains after surging 4.2% on Tuesday to lift the digital asset from its lowest price since November 2020.

Oil rose as traders await more details of a plan to curb Russian crude prices and assess the demand outlook in COVID-hit China.

Main events this week:

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  • S&P Global PMIs: US, Eurozone, UK, Wed

  • US Mortgage Applications, Durable Goods, Initial Jobless Claims, University of Michigan Sentiment, New Home Sales, Wednesday

  • Minutes of the Federal Reserve meeting on November 1 and 2, Wednesday

  • The European Central Bank publishes a report on its October policy meeting, Thursday

  • US stock and bond markets are closed for the Thanksgiving holiday, Thursday

  • US stock and bond markets close early on Friday

Some of the major movements in the markets:

Stores

  • The Stoxx Europe 600 Index was up 0.2% as of 9:20 a.m. London time.

  • S&P 500 futures changed little

  • Nasdaq 100 futures have changed little

  • Futures contracts on the Dow Jones Industrial Average changed little

  • The MSCI Asia Pacific Index rose 0.3%.

  • The MSCI Emerging Markets Index rose 0.4%.

currencies

  • The Bloomberg Spot Dollar Index has not changed

  • The euro was little changed at $1.0310

  • The Japanese yen was little changed at 141.37 per dollar

  • The offshore yuan fell 0.3 percent to 7.1612 per dollar

  • The British pound remained unchanged at $1.1886

Digital currencies

  • Bitcoin rose 2.6% to $16,547.03

  • Ether rose 3.2% to $1,165.89

bonds

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  • The yield on the 10-year Treasury fell 1 basis point to 3.75%.

  • Germany’s 10-year yield was little changed at 1.99%.

  • The UK 10-year yield fell four basis points to 3.10%.

goods

  • Brent crude rose 0.9 percent to $89.17 a barrel

  • Spot gold fell 0.2 percent to $1,737.05 an ounce

This story was produced with help from Bloomberg Automation.

– With assistance from Richard Henderson.

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© Bloomberg LP 2022

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Dollar falls as easing of restrictions in China boosts risk sentiment By Reuters

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© Reuters. FILE PHOTO: One hundred US dollar banknotes are seen in this illustration taken in Seoul on February 7, 2011. REUTERS/Lee Jae-won/File Photo

SINGAPORE (Reuters) – The dollar fell broadly on Monday after a rough week, weakening below 7 yuan as sentiment towards riskier non-dollar assets improved after signs of China easing some coronavirus-related restrictions.

More Chinese cities, including financial hub Shanghai and Urumqi in the far west, announced easing coronavirus restrictions over the weekend as China tries to soften its stance on COVID-19 restrictions in the wake of unprecedented protests against the policy.

“They may seem like small steps, but nonetheless they are a strong sign that China is taking measured steps toward reopening,” said Christopher Wong, currency analyst at OCBC.

China is preparing to announce soon easing nationwide testing requirements, as well as allowing positive cases and close contacts to isolate at home under certain conditions, people familiar with the matter told Reuters last week.

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The dollar fell below 7.0 yuan in foreign trade, while it jumped about 1.4% to 6.9507 on Monday morning, the strongest level since Sept. 13.

The euro, which measures the currency against six major peers including the yen and the euro, fell 0.18% to 104.28, its lowest since June 28.

The index fell 1.4% last week, capping a 5% decline for November, its worst month since 2010, on mounting expectations that the Federal Reserve is ready to scale back interest rate hikes after four consecutive 75-bps. Points increase.

Investors’ focus will be on US consumer price inflation data due on December 13, a day before the Federal Reserve wraps up its two-day policy meeting.

The US central bank is expected to raise interest rates by an additional 50 basis points at the meeting. Fed fund futures traders are now pricing the Fed’s benchmark rate to a peak of 4.92% in May.

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OCBC’s Wong said some degree of caution is still warranted because the Fed is not done tightening. “They’re still tightening up, it’s just that it’s going to be in baby steps.”

Traders appeared to be looking beyond the stronger-than-expected US jobs report for November on Friday after some Federal Reserve speakers calmed market concerns.

“We’ve blown past the US payrolls with a temporary jolt to risk markets,” said Chris Weston, head of research at Pepperstone, noting that the data supports the “soft landing” argument and is unlikely to change the Fed’s course.

Meanwhile, the Japanese yen was down 0.04% against the dollar at 134.37 per dollar, after rising 3.5% last week, off October’s low of 151.94.

The euro rose 0.38% to $1.0578, after rising 1.3% last week. It had earlier touched its highest level in more than five months at $1.05835.

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The pound rose to $1.23450, the highest level since June 17, and was last trading at $1.2339, up 0.42%.

The Australian dollar rose 0.75% to $0.684, while it rose 0.31% to $0.643.

================================================== == ======

The currency bid prices are at 0520 GMT

Description RIC Last US Close Pct Change YTD Pct High Bid Low Bid

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previous change

session

EUR/USD 1.0580 $1.0541 +0.37% -6.94% +1.0584 +1.0512

USD/JPY 134.3800 134.2950 +0.00% +16.75% +134.7600 +134.2800

EUR/JPY 142.18 141.53 +0.46% +9.10% +142.2200 +141.5700

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USD/CHF 0.9349 0.9368 -0.19% +2.51% +0.9393 +0.9344

GBP/USD 1.2337 1.2293 +0.37% -8.76% +1.2343 +1.2251

USD/CAD 1.3401 1.3474 -0.54% +5.99% +1.3473 +1.3386

AUD/USD 0.6841 0.6794 +0.63% -5.94% +0.6851 +0.6764

NZ 0.6429 0.6413 +0.27% -6.06% +0.6442 +0.6367

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All spots

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Spots in Europe

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Tokyo forex market information from Bank of Japan

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The Dow shines as tech stocks squeeze higher on the Nasdaq

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The Dow Jones Industrial Average is outperforming the broader S&P 500 to an extent not seen in nearly a century.

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Saudi Crown Prince invests in Credit Suisse unit, Wall Street Journal reports

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(Bloomberg) — Saudi Crown Prince Mohammed bin Salman is preparing to invest in the investment bank of Credit Suisse Group AG, The Wall Street Journal reported.

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The newspaper said, citing people familiar with the matter, that Prince Mohammed may invest about $500 million in the lender’s CS First Boston. Other investors could include former Barclays plc CEO Bob Diamond Atlas Merchant Capital, according to the report.

Credit Suisse Chairman Axel Lehmann said last week that the bank had received several additional commitments from investors regarding First Boston’s investment bank plan.

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Prince Mohammed is encouraging Saudi Arabia’s largest companies to expand globally, raising the country’s image as a serious investor and diversifying its economy. The kingdom is already backing Credit Suisse, with the National Bank of Saudi Arabia taking a 9.9% stake in the troubled Swiss bank.

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