Caution Clouds Global Assets Ahead of Fed Meeting: Market Recap

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(Bloomberg) – Global equities were mixed in cautious trading on Wednesday ahead of the Federal Reserve meeting and Chinese stocks fluctuated as investors reconsidered speculation that the country could abandon its Covid-zero policy.

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Mainland benchmarks moved in and out of positive territory while Hong Kong indices were down after surging on Tuesday. Beijing’s Covid policy has been the biggest concern for investors in the country’s assets, with restrictions and lockdowns pushing stock market measures among the worst in the world this year.

Japan’s Topix gauge rose slightly while the Nikkei 225 fell. South Korean and Australian stocks rose slightly. European and US equity futures advanced.

The S&P 500 closed lower after trading as much as 1% higher in Tuesday’s session in a setback triggered by the surprise rebound in job offers. Separate figures from the US manufacturing sector showed new orders contracted in October for the fourth time in five months, painting a less rosy picture for the economy.

The data came ahead of the Fed meeting later on Wednesday, when the central bank is expected to raise interest rates by 75 basis points for the fourth consecutive time, bringing the upper limit of its target range to 4%. The US 10-year yield traded around 4% in Asia, while the more policy-sensitive two-year yield remained close to 4.5%.

Former Treasury Secretary Larry Summers said the Fed should ‘stay the current course’, warning that rising expectations the central bank would pivot were ‘misguided’ and prolong a pandemic record among economists for ‘having failed miserably’. cheated on inflation”.

Shares of Japan-listed Sony jumped 12% on better-than-expected PlayStation production numbers. Shares of Advanced Micro Devices Inc., the U.S.-listed computer chip company, rose after hours trading after third-quarter earnings beat estimates as the company made further inroads into the market lucrative server chips.

Elsewhere in the markets, a dollar gauge fell and gold held steady. Oil rallied on reports of shrinking US inventories. The yen strengthened in a sign that traders expect a moderate impact from Fed tightening on the currency.

Key events this week:

  • EIA Crude Oil Inventory Report, Wednesday

  • Federal Reserve rate decision Wednesday

  • US MBA Mortgage Applications, ADP Jobs, Wednesday

  • Bank of England rate decision on Thursday

  • U.S. factory orders, durable goods, trade, initial jobless claims, ISM services index, Thursday

  • ECB President Christine Lagarde speaks on Thursday

  • U.S. nonfarm payrolls, unemployment, Friday

Some of the major movements in the markets:

Shares

  • S&P 500 futures rose 0.2% at 10:49 a.m. Tokyo time. The S&P 500 fell 0.4%

  • Nasdaq 100 futures rose 0.3%. The Nasdaq 100 fell 1%

  • The Topix index rose 0.2%

  • Australia’s S&P/ASX 200 index rose 0.3%

  • The Hang Seng index fell 0.4%

  • The Shanghai Composite Index was little changed

  • Euro Stoxx 50 futures rose 0.4%

Currencies

  • The Bloomberg Dollar Spot Index fell 0.2%

  • The euro rose 0.1% to $0.9888

  • The Japanese yen rose 0.7% to 147.20 per dollar

  • The offshore yuan rose 0.2% to 7.2930 to the dollar

Cryptocurrencies

  • Bitcoin rose 0.2% to $20,516.21

  • Ether rose 0.8% to $1,587.75

Obligations

Goods

  • West Texas Intermediate crude rose 1% to $89.28 a barrel

  • Spot gold rose 0.2% to $1,650.87 an ounce

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