Shares sobered by Fed warning, China acts on property

  • The Fed’s Waller plays the CPI as just one number
  • Beijing launches infrastructure support, COVID measures
  • Biden will meet Xi at the G20 summit

SYDNEY/LONDON, Nov 14 (Reuters) – Stock markets continued last week’s session on a more positive note on Monday after the head of the U.S. central bank warned investors not to overextend one inflation rate, while Chinese stocks received a boost for the country’s financial sector. .

The mild drop in U.S. prices was enough to see the two-year Treasury yield down 33 basis points for the week and the dollar losing nearly 4% — the fourth-biggest weekly drop since the exchange rate ended. free started more than 50 years ago.

However, the Federal Reserve did not accept the reduction caused by the US economy, Governor Christopher Waller says on Sunday that it will take a lot of soft news for the bank to take its foot off the brake.

Waller added that the market is ahead of itself with just one more rate hike, although he believes the Fed may be starting to think about going slower.

The future runs very fast with a medium-rate increase at 4.25-4.5% in December, then a pair of quarters will go to the highest level in the range of 4.75-5.0%.

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Two-year yields fell to 4.39%, after dipping as low as 4.29% on Friday.

Bruce Kasman, head of economic research at JPMorgan, said, “The surprise CPI decline is consistent with many indicators pointing to a slowdown in global inflation that should encourage moderation in monetary policy.” extending to the Fed and elsewhere.”

“This good news should be tempered by the realization that the decline in inflation will be too small for the central bank to declare its mission accomplished, and it will likely be more aggressive down the road.”

The benchmark European STOXX index rose 0.37% (.STOXX), and MSCI’s broader index of Asia-Pacific shares in Japan (.MIAPJ0000PUS) added 0.73%, after jumping 7.7% last week.

US markets looked set to open lower, with S&P E-mini futures down 0.26%.

WE ARE IN CHINA

Traders are waiting to see if Chinese stocks can extend their big rally amid reports that regulators asked financial institutions to extend support to stressed property producers. READ MORE

China’s stock index (.CSI000952) rose 3.5% in response. Blue chips (.CSI300) rose 1%, helped by changes in China’s COVID-19 restrictions, even as the country reported more cases over the weekend. READ MORE

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Ray Attrill, FX’s head of strategy, said, “It’s hard to see how the lawsuit is bad from an economic standpoint, but it’s a sign of a movement, however small, in the free plan. COVID and the market is getting into it with excitement,” said Ray Attrill, head of FX strategy. and NAB.

Support for China’s property sector, which consumes a lot of gold, pushed copper toward a five-month high. Three-month copper on the London Metal Exchange (LME) rose 0.3% to $8,519 a tonne by 0725 GMT.

US President Joe Biden will meet Chinese leader Xi Jinping in person on Monday for the first time since taking office, with US concerns over Taiwan, Russia’s war with Ukraine and North Korea’s nuclear ambitions high on his agenda.

News of the COVID-19 policy triggered a short-term decision in the yuan, which added to greater pressure on the dollar as the currency declined. The yuan was held 1.4% steady on Monday – the biggest move since 2005.

The dollar index moved lower on Monday at 106.69, still short of last week’s 111.280.

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The euro eased a touch to $1.0308, after rising 3.9% last week, when the dollar supported 139.56 yen following the 5.4% drubbing last week.

The dollar lost almost the Swiss franc , led in part by a warning from the Swiss National Bank that it will use rates and money purchases to suppress inflation.

Sterling fell back to $1.1755 ahead of the British Chancellor’s announcement on Thursday, where he is expected to announce tax and spending cuts.

Crypto currencies remain under pressure as at least $1 billion in customer funds are said to have been lost in the collapse of crypto exchange FTX.

Bitcoin returned 2.9% to $16,785, having shed almost 22% in the previous week.

Oil prices rose earlier and fell on Monday, after hopes of an increase in China’s demand for the US dollar weakened. Brent crude futures were down 32 cents, or 0.3%, at $95.67 a barrel by 0725 GMT after settling 1.1% on Friday.

Statement by Wayne Cole and Lawrence White; Edited by Shri Navaratnam, Kenneth Maxwell, William Maclean

Our principles: Thomson Reuters Trust Principles.

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