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Stocks rise, dollar falls according to Fed interest rate outlook: The Market Wrap

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(Bloomberg) — A measure of global stocks moved for a third straight gain Thursday and the dollar fell after minutes of a Federal Reserve meeting showed support for a rate hike.

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US futures rose after the S&P 500 closed at a two-month high on Wednesday before Thanksgiving. Equity benchmarks advanced in Japan, South Korea and Hong Kong, while figures fell in mainland China.

The move in China came as investors weighed the impact of record Covid-19 cases against signs of easing monetary conditions. Official comments aired on Wednesday indicated that the People’s Bank of China would allow banks to draw capital reserves to boost growth.

Gita Gopinath, the first deputy director of the International Monetary Fund, said in an interview with Bloomberg that China’s Covid zero policy has had a “significant impact on consumption” as the asset crisis “hits investment in the region and property developers “. to influence.” Television.

Government bond yields in Australia and New Zealand fell on Wednesday after government bond yields fell against the dollar. The greenback’s gauge fell on Thursday, a third day of declines. Due to the holiday in the US, there was no trading in government bonds.

Minutes from the Fed’s meeting earlier this month showed that many officials supported the need to moderate the pace of rate hikes, even as some underlined the need for higher closing rates.

That weighs on expectations that the central bank will raise interest rates by 50 basis points next month, ending a massive 75 basis point hike. Data also showed on Wednesday that US business activity slowed and job applications increased as the economy cooled.

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Oil fell as the European Union set a higher-than-expected price cap on Russian crude and signs of a global recession intensified.

Gold rose for a third day on Fed minutes. The precious metal has suffered from the US Federal Reserve’s aggressive monetary tightening policy to curb inflation, which has pushed bond yields and the dollar up, and in turn pushed it down about 16% from its peak in March.

Bill Ackman, founder of hedge fund Pershing Square Capital Management LP, said he is betting against the Hong Kong dollar and its peg against the greenback.

Pershing has a “big imaginary position” in Hong Kong dollar put options — bearish bets on the currency — he said in a tweet, adding that the peg no longer matters for Hong Kong.

South Korea raised the rate to 2% after the governor of the country’s central bank said some policymakers wanted higher final interest rates. The won and its emerging Asian counterparts also gained on the Fed rate outlook.

Main events of the week:

  • The ECB published the minutes of its policy meeting in October on Thursday

  • The US stock and bond markets are closed on Thursday for Thanksgiving

  • US stock and bond markets closed early on Friday

Some important movements in the markets:

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  • S&P 500 futures were up 0.2% as of 6:47am London time. The S&P 500 rose 0.6%

  • Nasdaq 100 futures rose 0.2%. Nasdaq 100 rose 1%

  • Topix index up 1.2%

  • The S&P ASX index rose 0.1%

  • Hang Seng index rose 0.6%

  • Shanghai Composite Index fell 0.3%

  • Euro Stoxx 50 futures were little changed

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Currencies

  • The Bloomberg Dollar Spot Index fell 0.3%

  • The euro rose 0.4% to $1.0436

  • The Japanese yen rose 0.6% to 138.82 per dollar

  • The offshore yuan rose 0.1% to 7.1448 per dollar

  • The British pound rose 0.3% to $1.2092

cryptocurrency

  • Bitcoin rose 1.2% to $16,676.72

  • Ether rose 2.9% to $1,202.77

bond

Goods

  • West Texas Intermediate crude fell 0.7% to $77.41 a barrel

  • Spot gold rose 0.3% to $1,754.50 an ounce

This story was created with help from Bloomberg Automation.

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©2022 Bloomberg LP

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