On Wednesday (November 23), Beijing time, the dollar index traded around 107.16 in early Asian trading; the dollar retreated on Tuesday, giving up some of the gains of the previous session, as investors boosted demand for riskier currencies, stocks, commodities and riskier currencies mostly strengthened, and concerns about the global economic outlook increased. Gold held above the lows reached in the previous session, with the retreat in the dollar and benchmark Treasury yields largely offset gains in equities as investors awaited clues about the path of the Fed's monetary policy. Oil prices rose more than 1 percent on Tuesday after Saudi Arabia, the world's largest oil exporter, said OPEC+ was sticking to production cuts and could take further steps to balance the market in support of prices.
Commodity close: Brent crude futures rose 1 percent to close at $88.36 a barrel. U.S. crude futures rose 1.14 percent to close at $80.95 a barrel. U.S. gold futures settled at $1,739.9 an ounce, essentially flat.
U.S. stocks closed: The Dow Jones Industrial Average rose 1.18% to 34,098.1, the S&P 500 rose 1.36% to 4,003.58, and the Nasdaq added 1.36% to 11,174.41.
Wednesday preview
Global markets at a glance
U.S. stocks rebounded on Tuesday, with the S&P 500 closing at its highest level in two-and-a-half months as Best Buy's sales forecast dispelled fears that high inflation would lead to lackluster holiday shopping season, while a rebound in oil prices helped push energy stocks higher.
Retailer Best Buy became the top-performing S&P 500 constituent, jumping 12.78 percent after forecasting a smaller drop in annual sales than previously announced and saying it believed greater deals and discounts would attract more customers. Best Buy's gains helped boost the S&P 500 retail index up 1.21%.
Conversely, discount retailer DollarTree tumbled 7.79 percent, the worst-performing component of the S&P 500, which also limited gains in the retail sector as the company cut its annual profit forecast for the second time.
Shawn Cruz, chief trading strategist at TDAmeritrade in Chicago, said, "If you look at the revenue and consumer continuum, the first half is relatively inelastic to some degree of cost increases, while the lower half is more sensitive." So DollarTrees around the world really doesn't have much capacity to pass on those costs, so they're going to take quite a hit. ”
The S&P 500 closed at its highest level since September 12. Support was also provided in the energy sector, which climbed 3.18 percent after falling in the previous two sessions as Saudi Arabia said OPEC+ was sticking to production cuts, refuting Monday's report that the alliance was considering increasing production, which briefly sent crude prices sharply lower. OPEC+ is a coalition of oil producers made up of the Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia.
Investors continue to try to assess the Fed's rate hike path, with Cleveland Fed President Mester reiterating on Tuesday that reducing inflation remains critical for the Fed, a day after she said support for a shift toward smaller rate hikes in December. Kansas City Fed President George said the Fed may need to raise interest rates to higher levels and stay there longer to curb consumer demand and cool inflation. Investors are still awaiting St. Louis Fed President Bullard's speech on Tuesday, and the minutes of the Fed's November meeting are scheduled for Thursday.
Trading was quiet on Tuesday, volume could be further reduced before the Thanksgiving holiday on Thursday, and U.S. stocks will close at noon on Friday. U.S. exchanges traded 9.45 billion shares, with an average trading volume of 11.75 billion shares over the past 20 trading days.
Dow ingredient drug distributor Walgreens Boots Alliance rose 2.96% after Cowen&;; Co upgraded the stock, citing a boost from its healthcare services business. Manchester United jumped late to close 14.66 per cent higher after Sky News reported that the Glazer family, owners of the football club, were exploring financial options that could include a full sale. Agilent Technologies climbed 8.08% after the application-focused solutions company reported upbeat fourth-quarter revenue. Pullbacks in the dollar and Treasury yields also helped support risk appetite.
noble metal
Gold held above the lows reached in the previous session on Tuesday, with the retreat of the dollar and benchmark Treasury yields largely offset gains in equities as investors await clues about the path of the Fed's monetary policy.
Daniel Pavilonis, senior market strategist at RJOFutures, said: "I think precious metals will try to get out of the difficult situation and continue to climb. But now the trend is directly related to interest rates. Global stock markets rose, major Wall Street indexes climbed, and fears of a lackluster holiday business for retailers eased.
U.S. Treasury yields and the dollar retreated as investors awaited the release of the minutes of the Fed meeting. Spot silver rose 0.9 percent to $21.04 an ounce, platinum rose 0.5 percent to $987.32 an ounce and palladium fell 0.3 percent to $1,859.06 an ounce.
crude
Oil prices rose about 1 percent on Tuesday after Saudi Arabia, the world's top oil exporter, said OPEC+ was sticking to production cuts and could take further steps to balance the market. However, oil prices cut gains in late trading after reports that the European Union delayed plans to fully implement price caps on Russian oil exports and softened key shipping provisions and downplayed its latest sanctions proposal. The European Union has proposed adding a 45-day transition period when introducing a price cap.
The European Union will ban imports of Russian oil from December 5, and a G7 plan will be implemented on the same day, allowing shipping service providers to service Russian oil exports only if the price price is below the price ceiling.
John Kilduff, a partner at AgainCapital LLC, said, "The price cap is proving to be a means for Western countries to keep Russian crude in the market, and the biggest sticking point in this market has been whether we will lose a lot of crude and refined product supplies from Russia, which has not yet happened." ”
Saudi state news agency SPA quoted the country's energy minister Al-Falih as saying on Monday that OPEC+ would not discuss any decision before the meeting, denying the Wall Street Journal's report that OPEC was considering increasing production, which caused oil prices to plunge more than 5 percent. The Saudi energy minister's speech supported oil prices throughout Tuesday.
Another OPEC producer, the United Arab Emirates, denied that it was negotiating changes to the latest OPEC+ deal, while Kuwait said it had not conducted such talks. Algeria said there had been no discussion of "impossible" changes to the OPEC+ agreement. OPEC+ will meet on December 4.
foreign exchange
The dollar retreated across the board on Tuesday, giving up some of the previous session's gains as investors boosted demand for riskier currencies. Stocks, commodities and riskier currencies mostly strengthened on Tuesday and worries about the global economic outlook increased.
The euro rose 0.5% to $1.02965, on track to end a three-day losing streak. Joe Manimbo, senior market analyst at Convera, said: "The tentative recovery in risk appetite has been enough to stop the dollar's rally for several days. The minutes of the Fed meeting will be released tomorrow, and for most of today, range trading dominates ahead of the U.S. holiday," Manimbo said, referring to Thursday's Thanksgiving holiday.
Since the beginning of this year, the dollar has strengthened against all major currencies in the process of the Fed's fight against inflation, boosted by the Fed's ultra-large interest rate hikes. But recent lower-than-expected U.S. consumer price data has fueled investors' hopes that the Fed may slow the pace of interest rate hikes.
Cleveland Fed Chairman Mester reiterated Tuesday that reducing inflation remains critical for the Fed.
Investors will carefully analyze the minutes of the Fed's November meeting, released on Wednesday, for any clues about the outlook for interest rates. Convera's Manimbo said: "The hawkish outlook of the Fed has supported the dollar, but expectations of a slower pace of tightening have limited the dollar's gains." ”
A recovery in risk appetite helped the Aussie rise 0.6 percent against the dollar and the New Zealand dollar rose 0.9 percent against the dollar on Tuesday as traders prepared for the RBNZ's biggest ever rate hike this week.
The pound rose 0.6 percent to $1.1885 after data showed the British government borrowed less than expected in October, although the budget deficit is likely to balloon in the coming months due to energy subsidies and a slowing economy.
Market news
Fed George: Higher savings can further boost consumption
Fed George said that as the Fed tightens monetary policy, the situation of savings glut will be a key factor in the economic outlook, and higher savings can further boost consumption; Current data show an increase in the level of savings in all areas; But low-income households are depleting their savings buffers faster; Wage growth remains strong.
The British Rail Union announced that it would hold a number of strikes
According to British media reports on November 22, due to long-term unresolved disputes over wages, jobs and working conditions, the British National Railway, Maritime and Transport Workers' Union announced on the same day that it would hold multiple 48-hour strikes in December and January next year. The strike will take place on December 13-14, 16-17 and January 3-4 and 6-7, 2023, according to the report. More than 40,000 employees of British Rail and 14 train operators will take part in the strike. In addition, due to the salary dispute, the British Association of Locomotive Engineers and Firefighters announced a strike on November 26, in which 12 train operating companies will participate.
Iran's nuclear chief announced an expanded uranium enrichment program
The head of Iran's Atomic Energy Organization said Tuesday it had added the Foreway underground facility to its list of sites where uranium was enriched to 60 percent purity levels, in a provocative response to U.N. watchdogs' accusations that Iran had undeclared nuclear facilities. This comes after the IAEA's board of directors passed a resolution last week calling on Iran to cooperate on traces of uranium found at three undeclared sites in the country. Iran's head of nuclear affairs, Eslami, said of the IAEA's statement: "We have warned before that political pressure and resolutions will not make Iran change its course, and for this reason we started uranium enrichment in Fordo." Iran has always insisted that its nuclear program is purely peaceful, although experts say a 60 percent uranium enrichment level is just one step away from a 90 percent weapons-grade level.
OECD: The ECB must close the interest rate gap with the Fed
The OECD warned on Tuesday that the ECB would have to raise its key interest rate further if it was to reduce persistently high inflation. While there have been some recent signs that inflation has peaked or approached, inflation is unlikely to fall back quickly to the 2% target set by many central banks. The ECB should raise its key interest rate from 1.5% to between 4% and 4.25% by the middle of next year, a peak well above consensus expectations. Inflation in the eurozone has surpassed that of the United States due to rising energy prices, and the euro has also fallen against the dollar. The ECB needs to raise interest rates to support the euro against the dollar and prevent a weakening euro that leads to further increases in the prices of imported goods and services.
Canada announced new sanctions against Belarus
On November 22, local time, Canadian Foreign Minister Jolly announced new sanctions against Belarus. It is reported that the sanctions include 22 Belarusian officials involved in the stationing or transportation of Russian military personnel and equipment. The sanctions also affect 16 Belarusian companies involved in the military manufacturing, technology, engineering, banking and railway sectors.
The EU provided 2.5 billion euros in macroeconomic assistance to Ukraine
On November 22, local time, European Commission President von der Leyen said on social media that the EU provided 2.5 billion euros in economic assistance to Ukraine on the same day. She said the EU plans to provide 18 billion euros in economic aid to Ukraine in 2023 for its reconstruction. Since February this year, the EU has provided Ukraine with a total of 6.7 billion euros in macroeconomic assistance.
The Dutch government's energy subsidy spending in 2022 will result in a government budget gap of around €7.5 billion
According to Dutch media reports, Dutch Finance Minister Karg said in the government to the House of Representatives when presenting the government's autumn budget memorandum that a series of measures introduced by the Dutch government to help businesses and people cope with the energy crisis will lead to a government budget gap of about 7.5 billion euros, which will further expand if energy prices continue to rise, and this gap can only be made up in next spring's budget. Capping household gas and electricity spending would cost €11.2 billion, and subsidies for energy-intensive small and micro enterprises would cost €1.65 billion. To balance this spending, the government will impose a tax on excess profits on the fossil fuel sector, which is expected to generate €3.2 billion. At the same time, the government is also studying imposing a tax on excess profits on manufacturers that use solar, wind and nuclear power to generate electricity.
Gazprom: Ukraine may intercept gas supplies to Moldova
Gazprom (Gazprom) issued an announcement on the 22nd that the amount of natural gas transiting through Ukraine to Moldova through the Suza metering station exceeded the actual transit of natural gas recorded at the Ukraine-Moldova border. The announcement said that on November 21, Moldovan Gas paid Gazprom part of the November payment according to the contract, and the actual amount of Russian gas delivered but not paid was 24.945 million cubic meters. Gazprom stressed that if the imbalance in the transit of Moldovan gas through Ukraine continues, Gazprom will begin to reduce supplies to the Suza gas metering station at 10 o'clock on November 28 by the difference between the amount of gas that should be supplied to Moldova per day and the gas actually received by Moldova.
This article originated from Huitong.com