MARKET WRAPS

Watch For:

European Economic Area Council meeting; ECB accounts of last monetary policy discussions; Germany business climate index; Deutsche Bundesbank financial stability review; France monthly business survey; trading updates from Remy Cointreau, Kingfisher, Intertek, Currys

Opening Call:

Shares may be mixed in Europe as the release of FOMC minutes showed most officials favored slowing interest-rate increases soon, and as eurozone PMI data pointed to a mild contraction. In Asia, stock benchmarks were mostly higher; Treasury yields and the dollar retreated; oil slipped and gold gained.

Equities:

European stocks may open mixed on Thursday after Fed minutes showed officials expect a slower pace of rate hikes ahead, and as a key measure of eurozone manufacturing and services activity indicated that the region's economy remained in contraction.

Investors are also keeping an eye on rising Covid-19 cases in China and digesting U.S. economic data showing business conditions are deteriorating, suggesting slower economic growth.

However, investor sentiment looks to be improving despite Wednesday's data.

"The FOMC has been keen to stress that the fight against inflation is not over yet and we expect rate rises to continue well into 2023, but the slowing of the pace of the hikes will add fuel to increasing market excitement," said deVere Group.

The Federal Reserve meets next on Dec. 13 and 14. Traders widely expect a 50-basis-point hike at the next meeting, with some betting on a 24% chance of a 75 basis points hike, according to CME Group's FedWatch Tool

U.S. stock exchanges will be closed for Thanksgiving Day on Thursday and will reopen on Friday for an abbreviated session.

Forex:

The dollar weakened in Asia, but may strengthen on the minutes of the FOMC's latest meeting, analysts said.

There are perceptions of a more dovish-leaning FOMC, said MUFG Bank, noting that Fed officials supported the need to moderate the pace of rate increases.

"The FOMC seems set on hiking by 50bps in December, but 2023 is more uncertain. Though the committee seems likely to raise the 2023 dots in the December SEP, any color on the distribution of participants' preferences in the minutes could help clarify next year's policy path," Goldman Sachs said.

Meanwhile, the euro looks set to rise gradually against the dollar as the European Central Bank is likely to pivot on its policy tightening later than the Federal Reserve, Societe Generale said.

"The Federal Reserve began tightening monetary policy earlier than the ECB and should stop before the ECB (the latter still has to announce details of its quantitative tightening)," SocGen said.

Following the euro's recent rally there could be a pause but it should rise closer to fair value, based on purchasing power parity, over the longer term, it added.

Bonds:

Bond yields took a hit, as investors parsed the Fed's November meeting minutes and as global economic growth concerns reverberated ahead of the Thanksgiving Day holiday.

"It's Thanksgiving Eve and the Treasury market has edged toward an ever-deepening curve inversion with 2s/10s slipping below -79 bp overnight. The path toward -100 bp has become increasingly easy to envision," said BMO Capital Markets.

Bond markets are closed Thursday and have an abbreviated session on Friday.

Energy:

Oil edged lower in Asia, weighed by the EU's talks about a Russian oil-price cap.

These discussions have placed pressure on the oil market with the suggested level higher than many were expecting, ING said, noting reports that the price cap may be set as high as $70/bbl.

This is above previous reports of around $60/bbl, and around the levels that Russia was already receiving, ING said. Talks in the EU are slated to continue Thursday, it added.

"The higher the price cap, the easier it will be for buyers in India and China to access shipping, insurance and other services from Group of Seven nations," said Mizuho, stressing that this is the intent of the G-7 intervention.

Oil remains rangebound "between $78 and $93 (on a closing basis) with Russia's response to the European Union and G-7 policies a bullish wild card to watch in early December," said Sevens Report Research.

"Russia may just cut exports and store oil causing a potential bullish supply-side shock to the market," it said.

"The next two weeks in the oil markets are unlikely to be dull."

Metals:

Gold edged higher, although gains may be short-lived, analysts said.

There appear to be signs of buying fatigue from commodity trading advisors, said TD Securities.

The recent rally in gold prices seems to have spurred long positions by discretionary money managers, which adds vulnerability to a consolidation lower in prices, it added.

"Gold appears to have established a range over the last week or so, with the upper end falling around $1,780 -- a major area of support in the first half of the year -- and the lower around $1,730 -- a major barrier of resistance in September and October," Oanda said.

"The FOMC minutes may determine which of these levels gives way first and whether gold can build on its recovery rally this month after such a long period of declines," it said.

---

Copper was higher in Asia amid signs of resilient demand in developed markets, ANZ said.

Mining company Codelco has indicated it is set to cut shipments of refined copper to China by 10%, mostly due to demand in North America and Europe, while global commodities trader Trafigura said the two regions are becoming bigger drivers of metal demand as usage is boosted by the energy transition, ANZ added.

---

Chinese iron-ore futures rose, buoyed by the latest support for the property sector.

Several state-owned banks in China said they would provide billions of funding support to some private developers, according to state-owned newspaper Securities Times.

Financial regulators have also officially introduced a package of supportive measures that markets had been expecting, and further stimulus may be announced at the Central Economic Work Conference in December, Donghai Futures said.

   
 
 

TODAY'S TOP HEADLINES

EU Fails to Reach Agreement on G-7's Price Cap for Russian Oil

European diplomats clashed over the price to cap Russian global oil sales on Wednesday as the bloc failed to reach agreement on a Group of Seven nations mechanism intended to crimp Russian oil revenues.

Diplomats involved in and briefed on discussions said they expected the 27-nation bloc to sign off on the price cap eventually as they race to put the system in place by Dec. 5, when both the cap and a European Union oil embargo would enter force. Discussions are expected to continue on Thursday.

   
 
 

Fed Minutes Show Most Officials Favored Slowing Rate Rises Soon

WASHINGTON-Most Federal Reserve officials thought they should slow the pace of interest-rate increases after approving a 0.75-percentage-point rate rise at their meeting earlier this month to battle high inflation.

   
 
 

Pro Take: Crypto Firms' Empty Pledge to Remake Finance

Cryptocurrency flows through a largely unregulated financial system every day and the industry answers to no governmental authority. These upstarts pride themselves on sticking it to the established financial system. And yet, some of the most celebrated crypto executives have revealed themselves to be far worse guardians of capital than their traditional counterparts.

FTX, along with other crypto platforms, touted itself as a better option than traditional banks and brokerages all with little to no internal or regulatory oversight.

   
 
 

Gucci's Creative Chief to Step Down

Alessandro Michele, whose eccentric designs reinvigorated Gucci, is stepping down as creative director of the Italian luxury brand as a period of rapid growth peters out.

Parent company Kering SA said in a statement late Wednesday that Mr. Michele was leaving his post at the fashion house having "played a fundamental part in making the brand what it is today."

   
 
 

Hackers Temporarily Take Down European Parliament Website

The European Parliament's website was briefly disabled by a denial-of-service cyberattack on Wednesday, hours after lawmakers passed a resolution labeling Russia a state that sponsors terrorism.

European Parliament President Roberta Metsola tweeted that the institution was "under a sophisticated cyberattack. A pro-Kremlin group has claimed responsibility."

   
 
 

Amazon Can't Get Peloton Back in the Black

Even the Everything Store can only do so much.

When it comes to Peloton, Amazon can definitely be of some help. The e-commerce giant started selling Peloton's basic stationary bike in late August, one month before the end of the equipment company's fiscal first quarter.

   
 
 

FTX Hires Ex-Regulators to Investigate Firm's Collapse

Cryptocurrency exchange FTX, whose recent collapse has led to questions about lacking regulatory oversight, has hired a fitting team to help untangle the mess: former senior U.S. regulators.

In its first hearing in Delaware bankruptcy court on Tuesday, a lawyer representing FTX said the firm has hired former enforcement chiefs from the U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission, now both partners at law firm Sullivan & Cromwell LLP, to help the company's new chief executive investigate what went wrong.

   
 
 

Write to singaporeeditors@dowjones.com

   
 
 

Expected Major Events for Thursday

06:00/FIN: Oct PPI

07:00/NOR: 3Q Labour Cost Index - preliminary figures

07:00/EU: Oct New Commercial Vehicle Registrations in Europe statistics (EU27 + EFTA3)

07:00/NOR: Sep Labour force survey SA, incl unemployment

07:45/FRA: Nov Monthly business survey (goods-producing industries)

08:00/CZE: Nov Business cycle survey (consumer/business confidence)

08:30/SWE: Swedish repo rate announcement

09:00/GER: Nov Ifo Business Climate Index

09:00/ICE: Oct Labour Force Survey

11:00/TUR: Turkish interest rate decision

11:00/UK: Nov CBI Industrial Trends Survey

11:00/IRL: 3Q Labour Force Survey

13:00/POL: Oct Broad money M3

14:00/BEL: Nov Business Confidence Survey

All times in GMT. Powered by Onclusive and Dow Jones.

Write to us at newsletters@dowjones.com

We offer an enhanced version of this briefing that is optimized for viewing on mobile devices and sent directly to your email inbox. If you would like to sign up, please go to https://newsplus.wsj.com/subscriptions.

This article is a text version of a Wall Street Journal newsletter published earlier today.

 

(END) Dow Jones Newswires

November 24, 2022 00:17 ET (05:17 GMT)

Copyright (c) 2022 Dow Jones & Company, Inc.