Here’s what to know for Wednesday, November 30:
Risk markets are in a state of uncertainty as the end of the month approaches, before Fed Chairman Powell talks about the economy on Wednesday and US Nonfarm Payrolls on Friday. Risk appetite had worsened on Monday after protesters and police clashed over tight COVID restrictions, supporting the DXY Dollar Index, which had otherwise fallen to 106.82 from a 20-year high. from 114.78 on September 28.
Jerome Powell is expected to reaffirm the Fed’s unwavering commitment to tackling inflation, ANZ Bank analysts said. Analysts also highlighted the possibility of Powell citing the ”need for more measured rate hikes given rising economic risks either way as policy tightens and a degree of optimism that the Fed will be capable of achieving a soft landing”.
Meanwhile, the US central bank is expected to raise rates by an additional 50 basis points when it meets on December 13-14, although the odds of a 75 basis point hike have increased in recent weeks and they now stand at a 37% probability. WIRP suggests it is fully priced in, with around a 15% chance of a move greater than 75 basis points. The swap market continues to price a top rate of 5.0%, with small chances of a top of 5.25%.
In markets, Wall Street was mixed on Tuesday, with Apple and Amazon losing. At press time, the S&P 500 was down 0.14% and was on track for its second straight month of gains in November, amid bets that recent inflation readings showing a slight cooling in prices will lead the Fed to to reduce them. The Nasdaq was down 0.70%, while the Dow Jones Industrial Average remained sideways. In Europe, the Euro Stoxx 50 was broadly unchanged and the FTSE 100 rose 0.5%.
The US 10-year yield rose 6 basis points to 3.74%, weighing on the euro, which fell 0.1% to 1.0330. The inflation rate in Germany slowed to 10% in November, from 10.4% in October, but remained near high levels not seen since reunification. Sentiment remains supportive of the euro as the European Central Bank remains intent on raising interest rates to curb high inflation. Sterling was around 1.1950 and down 0.1% on the day, hitting lows in what could be a double bottom on the hourly time frame.
The Aussie had a better bid as sentiment lifted on hopes that China would reopen from COVID lockdowns. AUD/USD rallied as high as 0.6748 and ended the day around 0.5% higher. WTI rose despite speculation that OPEC will leave everything unchanged, and fell 1.5% at channel resistance. Gold fell 0.3% below $1,750, hitting a low of $1,747, while bitcoin rallied more than 1.5% after retesting its yearly lows yesterday.
For today’s session, the Australian Consumer Price Index and the Chinese PMI will be key in the Asian sessions.
Source: Fx Street
I am a writer for World Stock Market. I have been working in finance for over 7-8 years, and I have experience with a variety of financial instruments. My work has taken me to Japan, China, Europe, and the United States. I speak Japanese and Chinese fluently.