Global Markets: Stocks churn ahead of Fed minutes as oil tumbles on price cap plan

Twamev Construction and Infrastructure

23/11/2022 13:26

* 
      Fed minutes for November due at 1900 GMT
    

        * 
      U.S. Thanksgiving public holiday on Thursday
    

        * 
      Stock eke out slim gains globally
    

        * 
      Euro zone economic data points to recession
    

        * 
      China hit by rising COVID-19 infections
    

  
    By Huw Jones
       LONDON, Nov 23 (Reuters) - Global shares churned on
Wednesday ahead of minutes of a Federal Reserve meeting that
could shed light on whether the U.S. central bank was
considering moderating interest rate hikes.
    Crude oil prices tumbled as the Group of Seven (G7) nations
looked at a price cap of $65 to $70 a barrel on Russian oil,
above where the crude grade is currently trading.
    Wall Street  1YMcv1   NQcv1  was set for a muted start, with
little in the way of major corporate news to spur trading ahead
of Thursday's U.S. Thanksgiving public holiday, when markets are
closed.
    The Fed has raised rates sharply this year in a bid to curb
surging inflation, and New Zealand's central bank earlier on
Wednesday increased interest rates by a record 75 basis points
to 4.25%, a harbinger of more likely hikes from the Federal
Reserve, European Central Bank and Bank of England next month.
    "There is an expectation that the Fed is probably closer to
end of rate hiking cycle than the beginning, certainly to the
extent of the rate hikes, the bulk are behind them," said Mike
Hewson, chief markets analyst at CMC Markets.
    The MSCI All Country stock index   .MIWD00000PUS  was up
0.16%, though it still down about 18% for the year.
    In Europe, the STOXX  .STOXX  index of 600 companies was up
0.3%, leaving it off about 10% for 2022.
    David Bizer, managing partner at investment manager Global
Customised Wealth, said investors were being guided by what they
think the Fed would do next, as signs of a slowdown in the U.S
economy become clearer.
    "The appreciation in markets overall in the fourth quarter
is driven by this belief that the Fed is awakening to the fact
that the pace and magnitude of their rate increases might have a
near term conclusion. It gives the markets confidence that this
is going to be the end," Bizer said.
    The downturn in euro zone business activity eased slightly
in November but overall demand continued to decline as consumers
cut spending amid a cost of living crisis, data showed, adding
to evidence the currency bloc is entering recession.
    "The outcome dispels fears of a severe slump and is
consistent with a mild technical recession at the turn of the
year," ING bank said in a note to clients.
    In China, authorities imposed restrictions to rein in a
rapid rise in COVID-19 infections, compounding investor worries
about the world's second largest economy.
    COVID RESTRICTIONS
    MSCI's broadest index of Asia-Pacific shares outside Japan
 .MIAPJ0000PUS  rose 0.5%, buoyed by gains in U.S. stocks
overnight. The index is up 12% so far this month.  
    Hong Kong's Hang Seng Index  .HSI  was up 0.6%, while
China's CSI300 Index  .CSI300  gained 0.1%.
    "The biggest story for investors in Asia is still the China
reopening," said Suresh Tantia, Credit Suisse's senior
investment strategist in Singapore.
    "We had seen China markets rally up to 20% but those
expectations are being dialled back, we think a reopening will
be a slower process and will not be done in a hurry."
    China on Wednesday reported 29,157 new COVID infections for
Nov. 22, compared with 28,127 new cases a day earlier. Case
numbers in Beijing and Shanghai are steadily rising, and remain
high in several major manufacturing and export hubs, prompting
authorities to close some facilities.
    The yield on benchmark 10-year Treasury notes  US10YT=RR 
traded at 3.7799% compared with its U.S. close of 3.758% on
Tuesday. 
    The two-year yield  US2YT=RR , which rises with traders'
expectations of higher Fed fund rates, touched 4.5434% compared
with a U.S. close of 4.517%. 
    Ahead of the Fed minutes, the dollar index  =USD , which
tracks the U.S. currency against a basket of those of other
major trading partners, was slightly weaker.
    The euro single currency  EUR=  edged 0.17% higher to
$1.032.
    "The U.S. dollar lost a little of its recent gains
(as) central bankers' consensus about how much more interest
rates should rise is fraying," Commonwealth Bank analyst Tobin
Gorey wrote on Wednesday.
    Oil prices inched higher as data showed a
larger-than-expected U.S. crude drawdown last week, outweighing
concerns about lower fuel demand from China.
    U.S. crude  CLc1  reversed earlier gains to fall 2.5% to
$78.92 a barrel, while Brent crude  LCOc1  shed 2.4%% to $85.99
a barrel.
    Spot gold  XAU=  was traded at $1,736 per ounce, down 0.2%
on the day.  GOL/ 
    While the FTX exchange collapse continues to roil
cryptocurrency markets, Bitcoin  BTC=  was up 2% in at $16,483.
    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
World FX rates YTD    http://tmsnrt.rs/2egbfVh
Global asset performance    http://tmsnrt.rs/2yaDPgn
Asian stock markets    https://tmsnrt.rs/2zpUAr4
Central banks ramp up fight against inflation    https://tmsnrt.rs/3iam1hy
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
 (Reporting by Scott Murdoch in Sydney and Huw Jones in London;
Editing by Kenneth Maxwell, Kim Coghill, Miral Fahmy and Tomasz
Janowski)
 ((Scott.Murdoch@thomsonreuters.com;))
 
((To read Reuters Markets and Finance news, click on 
https://www.reuters.com/finance/markets
For the state of play of Asian stock markets please click on:  0#.INDEXA ))