Stocks mixed ahead of Fed minutes as oil falls on price range plan

  • Fed minutes for November at 1900 GMT
  • American Thanksgiving is a public holiday on Thursday
  • Globally, stocks posted slim gains
  • Eurozone economic data points to a slowdown
  • China is suffering from increasing number of COVID-19 infections

London, Nov. 23 (Reuters) – Global stocks were mixed on Wednesday, minutes ahead of a Federal Reserve meeting that could shed light on whether the U.S. central bank is considering easing interest rate hikes.

Crude oil prices fell as Group of Seven (G7) countries saw Russian oil prices hover between $65 and $70 a barrel.

Wall Street was set for a muted start on Thursday ahead of the US Thanksgiving public holiday, when markets are closed, in the way of major corporate news to stimulate trading.

The central bank has raised rates sharply this year in an effort to control rising inflation, and New Zealand’s central bank raised interest rates by a record 75 basis points to 4.25% on Wednesday, prompting more hikes from the Federal Reserve and the European Central Bank. Bank and the Bank of England next month.

“There is an expectation that the federal rate hike will be closer to the end of the cycle than the beginning, and certainly to the extent of the rate hikes, the aggregate will be behind them,” said Mike Hewson, chief market analyst at CMC Markets.

MSCI All Country Stock Index (.MIWD00000PUS) Up 0.16%, although it was down 18% year-on-year.

In Europe, the STOXX (.STOXX) The index of 600 companies rose 0.3% to 10% in 2022.

David Pizer, managing partner at investment manager Global Customize Wealth, said investors are speculating about what the Fed will do next as signs of a slowdown in the U.S. economy become clear.

“The value of the overall markets in the fourth quarter is driven by this belief that the Fed is waking up to the fact that the pace and magnitude of their rate hikes may have a near-term conclusion. This gives markets confidence in the conclusion,” Pizer said.

A slowdown in euro zone business activity eased slightly in November, but overall demand continued to fall as consumer spending cut amid a cost-of-living crisis, adding to evidence the currency bloc is entering recession.

“The result allays fears of a sharp downturn and is consistent with a mild technical slowdown at the start of the year,” ING Bank said in a note to clients.

In China, authorities imposed restrictions to curb a rapid rise in COVID-19 infections, raising investor concerns about the world’s second-largest economy.

Reuters Graphics

Covid restrictions

MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) Up 0.5%, buoyed by gains in U.S. stocks overnight. The index is up 12% so far this month.

Hong Kong’s Hong Kong Index (.HSI) China’s CSI300 index rose 0.6% (.CSI300) Gained 0.1%.

“The biggest story for investors in Asia is still the reopening of China,” said Suresh Tantia, senior investment strategist at Credit Suisse in Singapore.

“We’ve seen China markets rise as much as 20%, but those expectations are being dialed back and the reopening will be a slow process and not rushed.”

China reported 29,157 new Covid infections on November 22, compared with 28,127 new cases a day earlier. Case numbers are steadily rising in Beijing and Shanghai, and high in several major manufacturing and export hubs, prompting authorities to close some facilities.

The yield on the benchmark 10-year Treasury note traded at 3.7799%, up from 3.758% on Tuesday.

Two-year yields touched 4.5434%, compared with a US close of 4.517%, rising with traders’ expectations that the Fed funds rates will be higher.

Ahead of the Fed minutes, the dollar index, which tracks the U.S. currency against a basket of other major trading partners, was slightly weaker.

The euro single currency rose 0.17% to $1.032.

“The US dollar has lost some of its recent gains (so) central bankers’ consensus on how much more interest rates should rise is frying,” Commonwealth Bank analyst Tobin Corey wrote on Wednesday.

Oil prices rose as data showed larger-than-expected U.S. crude oil inflows last week outweighed concerns about lower fuel demand from China.

U.S. crude fell 2.5% to $78.92 a barrel, while Brent crude was down 2.4% to $85.99.

Spot gold was trading 0.2% lower at $1,736 an ounce.

Bitcoin rose 2% to $16,483 as the FTX exchange collapse continued to rock cryptocurrency markets.

Scott Murdoch in Sydney and Huw Jones in London report; Editing by Kenneth Maxwell, Kim Coghill, Mirel Fahmy and Tomasz Janowski

Our Standards: Thomson Reuters Trust Principles.

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