Connect with us
Finance Digest is a leading online platform for finance and business news, providing insights on banking, finance, technology, investing,trading, insurance, fintech, and more. The platform covers a diverse range of topics, including banking, insurance, investment, wealth management, fintech, and regulatory issues. The website publishes news, press releases, opinion and advertorials on various financial organizations, products and services which are commissioned from various Companies, Organizations, PR agencies, Bloggers etc. These commissioned articles are commercial in nature. This is not to be considered as financial advice and should be considered only for information purposes. It does not reflect the views or opinion of our website and is not to be considered an endorsement or a recommendation. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third-party websites, affiliate sales networks, and to our advertising partners websites. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish advertised or sponsored articles or links, you may consider all articles or links hosted on our site as a commercial article placement. We will not be responsible for any loss you may suffer as a result of any omission or inaccuracy on the website.
INVESTING

Wall St seen steady ahead of inflation data, Fed later in week

Published On :

By Huw Jones

LONDON (Reuters) – Global stocks, oil and the dollar languished on Monday as investors braced for the last round of transatlantic interest rate hikes this year from a trio of central banks, hoping that a hitherto hefty pace of increases in borrowing costs will finally show signs of easing.

S&P 500 futures and Nasdaq futures recovered earlier losses to edge higher, indicating a steady start on Wall Street and helping European indices trim their modest losses.

Oil prices gave up early gains to deepen a multi-week decline, as a weakening global economy offset tighter supplies from the closure of a key pipeline supplying the United States, and Russian threats of a production cut.

The dollar eased, its losses contained by data last week that showed U.S. wholesale inflation rose more than expected last month, reinforcing the view that the Federal Reserve may have to keep interest rates higher for longer.

The U.S. consumer price index for November is due on Tuesday, when a slowdown in core annual inflation is anticipated.

A heavy event risk calendar this week stands to define the core themes for 2023,” ING bank said.

Market consensus was still “underappreciating” the risk of inflation staying higher longer, and “dangerously second-guessing” the Fed in terms of rate cuts in the second half of next year, ING said.

The MSCI all country stock index was down 0.2%, the benchmark having lost about 18% so far this year, wiping out all gains chalked up in 2021.

In Europe, the STOXX index of 600 companies was down 0.6%.

Economists expect the Federal Reserve on Wednesday, and the European Central Bank and Bank of England on Thursday to all raise rates by 50 basis points, still a slowing down from the 75 basis point hikes seen in recent meetings.

Patrick Spencer, vice chair of equities at Baird investment bank, said central banks will start taking a less aggressive stance this week, though Tuesday’s CPI data will be critical.

It’s the last important week of the year, after this week you’ve got no real sort of catalysts. If the CPI is a muted number, we’re off to the races and we’ll get our year-end rally,” Spencer said.

But irrespective of the CPI, deflationary pressures are increasing, with crude oil prices down for the year, and iron ore, lumber and house prices also down, Spencer said.

“All this talk of recession, I think it is certainly in the price, it’s in the markets. The key about recession is generally employment, and I think employment is going to be stronger than people give it credit,” Spencer said.

ASIAN SHARES FALL

In Asia, MSCI’s broadest index of Asia-Pacific shares outside Japan slid 1.2%, erasing almost all of the previous week’s gains stemming from optimism that China is finally opening up its economy with the dismantling of its zero-COVID policy.

Japan’s Nikkei eased 0.2%.

Chinese bluechips dropped 1.1%, while Hong Kong’s Hang Seng index was down 2.2%, as investors’ focus shifted away from crippling COVID-19 curbs to the surge in infections that is now disrupting the economy.

While the Fed is widely expected to raise rates by 50 basis points on Wednesday at its last meeting of 2022, the focus will also be on the central bank’s updated economic projections and Fed Chair Jerome Powell’s press conference.

We also want to understand if Jay Powell opens the door to a slowdown to a 25bp hiking pace from February – again, while in line with market pricing, this could be taken that we’re closer to the end of the hiking cycle and is a modest USD negative,” said Chris Weston, head of research at Pepperstone.

Kevin Cummins, chief U.S. economist at NatWest, said any surprise in the November CPI report was unlikely to shift the Fed from a 50-basis-point rate hike, although it would play a bigger role in the policy statement and the tone of Powell’s press conference.

In currency markets, the dollar eased 0.295% to 104.74, although it was not too far away from the five-month trough of 104.1 hit a week ago.

Sterling gained 0.2% to $1.2295.

Treasury yields held largely steady on Monday. The yield on benchmark 10-year Treasury notes eased to 3.5342%, from its U.S. close of 3.5670%. The two-year yield touched 4.3273%, down slightly from its U.S. close of 4.330%.

Brent crude futures were off 0.7% at $75.58 a barrel while U.S. West Texas Intermediate crude was at $70.72 a barrel, off 0.4%.

Spot gold was 0.3% lower at $1,792 per ounce.

 

(Reporting by Huw Jones, Editing by Bradley Perrett, Sam Holmes, David Evans and Susan Fenton)

Continue Reading

Why pay for news and opinions when you can get them for free?

       Subscribe for free now!


By submitting this form, you are consenting to receive marketing emails from: . You can revoke your consent to receive emails at any time by using the SafeUnsubscribe® link, found at the bottom of every email. Emails are serviced by Constant Contact

Recent Posts