Thursday 01st December 2022: Markets take Powell’s comments in its stride

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Global Markets:

  • Asian Stock Markets : Nikkei up 1.15%, Shanghai Composite up 0.65%, Hang Seng up 1.74%, ASX up 0.90%
  • Commodities : Gold at $1793.65 (+1.92%), Silver at $22.54 (+3.50%), Brent Oil at $86.75 (-0.25%), WTI Oil at $80.41 (-0.17%)
  • Rates : US 10-year yield at 3.616, UK 10-year yield at 3.179, Germany 10-year yield at 1.886

News & Data:

  • (USD) Pending Home Sales m/m -4.60% vs -5.80% expected
  • (USD) JOLTS Job Openings 10.33M vs 10.24M expected
  • (USD) Prelim GDP q/q 2.90% vs 2.80% expected
  • (USD) ADP Non-Farm Employment Change 127K vs 196K expected
  • (EUR) Core CPI Flash Estimate y/y 5.00% vs 5.00% expected
  • (EUR) CPI Flash Estimate y/y 10.00% vs 10.40% expected

Markets Update:

Asian stock markets are trading mostly higher on Thursday, following the broadly positive cues from global markets overnight, as traders cheered US Fed Chair Jerome Powell’s comments about interest rate hikes, which provided further evidence the central bank plans to slow its aggressive pace of interest rate hikes as soon as next month. Powell noted during a speech at a hybrid Brookings Institution event that the full effects of the Fed’s rapid rate increases have yet to be felt.

The Japanese stock market is significantly higher on Thursday, snapping a four-session losing streak, with the Nikkei 225 nearing the 28,300 level, with the gains led by technology stocks. Mainland China stocks traded up 0.7% and Hong Kong shares rose 1.7% in early trade after they closed higher on Wednesday following the easing of COVID-19 measures in Guangzhou city.

Crude oil futures surged on Wednesday after data showed a steep drop in U.S. crude inventories last week. Expectations of increased demand from China and a weaker dollar also contributed to the jump in oil prices. The safe-haven dollar also lost its footing, with the dollar index – which measures the currency against six major peers including the yen and euro – extending Wednesday’s more than 1% drop into Thursday, dipping as low as 105.69.

Upcoming Events:  

  • 07:30 AM GMT – (CHF) CPI m/m
  • 01:30 PM GMT – (JPY) BOJ Gov Kuroda Speaks
  • 01:30 PM GMT – (USD) Core PCE Price Index m/m
  • 01:30 PM GMT – (USD) Unemployment Claims
  • 03:00 PM GMT – (USD) ISM Manufacturing PMI