FPG Overnight Headlines 29/11/2022

Overnight headlines

At 3.68 percent, the yield on the US 10-year note was unchanged.

Wall Street mood was negatively impacted by the COVID protests in China and the Federal Reserve officials’ ongoing calls for higher interest rates, with real estate leading all 11 S&P 500 industry groups below.

One of the St. Louis Fed’s most hawkish officials, James Bullard, stated that he believes “markets are underpriceing a little bit the risk that the [Fed’s policy committee] will have to be more aggressive rather than less aggressive in order to contain the very substantial inflation that we have in the US.”

Separately, John Williams, the head of the New York Fed, stated in an online forum sponsored by the Economic Club of New York that his “baseline view is that we’re going to need to raise rates further from where they are today” and that “we’re going to need to keep restrictive policy in place for some time,” at least through 2023.

According to the Platts division of S&P Global Commodity Insights, “market participants continued to cite poor market confidence and see large uncertainty pertaining to market demand outlook,” the spot price of iron ore decreased marginally on Monday.

According to Platts, portside liquidity was also stable, and while some Chinese steel mills are planning to increase stockpiles before the December holidays, numerous mills from various parts of China said they will be aiming for a level of inventory that is even lower than it is at the moment.

China’s protests over the country’s harsh COVID regulations “are a huge political test for President Xi Jinping, but they are unlikely to grow into a national movement that would endanger his leadership,” according to a note from Eurasia Group.

Additionally, they do not portend a high-level retreat from zero-COVID initiatives. Strict containment measures will continue to be in place because illnesses are still rising across the country.

When OPEC+ meets next, though, “OPEC+ will seriously contemplate a new output cut, particularly if crude prices fall much below their current level in the following week,” according to Eurasia Group.

Markets are likely to face considerably higher levels of volatility than usual over the next two weeks as a result of the rising turmoil in China, the anticipated Russian oil price cap, the implementation of EU sanctions, and the scheduled OPEC+ summit.

Market movements

• Bitcoin fell 2.3% to US$16,191
• Australian dollars fell 1.45% to 66.53 cents
• The Dow fell 1.5% on Wall Street. S&P -1.5% Nasdaq fell 1.6%
• Stoxx 50 in Europe fell by 0.7% FTSE -0.2% CAC -0.7% DAX -1.1%
• Iron ore fell by 0.8% to US$98.90 a tonne,
• spot gold fell by 0.8% to US$1741.64/oz, and
• Brent crude fell by 0.1% to US$83.53/b.
• The 10-year yield was US$3.68%. Germany 1.98% Australia 3.51 percent

Today’s agenda

No local data

Overseas data: November consumer confidence index, US September FHFA and S&P CL CS home prices, and November economic and consumer confidence for the Eurozone