MARKET WRAPS

Watch For:

EU unemployment, flash estimate euro area inflation; Germany labor market statistics; UK GDP, balance of payments, business investment, nationwide house price index, money and credit; France PPI, household consumption expenditure, provisional CPI; Italy unemployment, provisional CPI, cities CPI; trading update from Carnival

Opening Call:

European stocks may struggle when markets open Friday. Asian stock benchmarks dropped; the dollar steadied; Treasury yields largely rose; while oil fell and gold pushed slightly higher.

Equities:

Shares may extend losses at Friday's open. Rockiness in markets has been exacerbated this week by the U.K. government's efforts to get its economy back on track. The U.K. government unveiled late last week plans for unfunded tax cuts, spooking markets.

On Thursday, U.K. PM Liz Truss rattled investors with her first public comments defending her government's plans to cut taxes.

"This volatility is quite breathtaking," said Peter Bermont, senior portfolio manager and managing director of Bermont Gold Wealth Advisory.

Decades-high inflation has thrown consumers and businesses for a loop, and the Federal Reserve and other central banks are trying to fight it with higher rates. Money managers worry that the central banks will overdo it and tip the economy into recession.

"Central banks remain wholly focused on inflation and taking rates higher," said Chris Turner, global head of markets at ING. "Even if that means causing recession."

Read: Fed must try to avoid a 'harsh recession,' Daly says

Forex:

The greenback steadied early Friday. The dollar's strength has surprised everyone as 3Q comes to an end, Silicon Valley Bank's Minh Trang said.

"The Fed has been consistent in their stance that they're going to continue tightening rates until inflation is at comfortable pace, and they've basically said we're not there yet," the senior forex trader said.

"You could argue that the dollar has gotten a third or fourth wind behind its sails over the last month."

Read: Why a soaring dollar is raising questions -- and doubts-- about a Plaza Accord-style intervention

Bonds:

Treasury yields rose, extending gains after the German inflation report on Thursday reignited concerns about persistent price gains and the likelihood of higher U.S. rates.

Investors remain concerned about central banks aggressively lifting rates to damp inflation running near its fastest pace in 40 years.

Data from Germany showed inflation coming in above 10%, which led to Thursday's selloff in government bonds, pushed yields up, and contributed to the declines in all three major U.S. stock indexes.

Meanwhile, Wednesday's broad bond rally, sparked by the Bank of England's intervention to support the gilt market, faded.

Read: Global bonds undergo worst selloff since the 90s

Energy:

Oil futures fell in Asia, as investors mull over prospects of a production cut next week by OPEC+ amid ongoing worries about the demand outlook.

Market sentiment has been weighed by concerns that oil demand could remain under pressure after the Fed doubled down on future interest rate increases, ANZ said.

"A deteriorating crude demand outlook won't allow oil to rally until energy traders are confident that OPEC+ will slash output at the October 5th meeting," Oanda's Edward Moya said.

Metals:

Gold prices rose slightly early Friday, rebounding from overnight declines amid higher U.S. Treasury yields.

"Developments coming out of the US may sway the price of gold as the FOMC retains a hawkish forward guidance for monetary policy, and the rising interest rate environment across advanced economies may continue to sap the appeal of bullion as the Fed appears to be on track to carry its hiking-cycle into 2023," said DailyFX.

--

Aluminum prices rose in Asia, buoyed by a media report of a possible ban by the London Metal Exchange on Russia's supplies of the metal.

The LME is reportedly looking to launch a discussion paper on whether and under what conditions it should block Russian metal from being delivered to its network of warehouses, ANZ said.

While no final decision has been taken on issuing the paper, this could have significant ramifications for the metals' markets, ANZ added.

   
 
 

TODAY'S TOP HEADLINES

China's Factory Activity Data Paints Mixed Picture of Economy

Official and private gauges of China's factory activity painted a mixed picture of the country's economy in September, with the government index showing a return to expansion, while the private index slipped further into contraction.

The official manufacturing purchasing managers index rose to 50.1 in September, recovering from 49.4 in August and beating the 49.8 median forecast made by economists polled by The Wall Street Journal, according to figures released Friday by the National Bureau of Statistics.

   
 
 

China's Central Bank Gives Cities Room to Lower Mortgage Rates

China's central bank is giving local governments leeway to lower mortgage rates for first-time home buyers, in a bid to shore up the nation's slumping real-estate market.

The People's Bank of China said late Thursday that cities that have recorded month-on-month and year-over-year drops in home prices between June and August can relax the floor on mortgage rates for first-time buyers.

   
 
 

Russian Oligarch Oleg Deripaska Charged With Violating U.S. Sanctions

The Justice Department on Thursday charged Russian industrial tycoon Oleg Deripaska and three of his associates with sanctions evasion and other crimes, the latest step in an effort by the U.S. and its allies to hold wealthy associates of Russian President Vladimir Putin accountable for his country's invasion of Ukraine.

Federal prosecutors in Manhattan charged Mr. Deripaska, a raw-materials magnate who founded Russian aluminum giant Rusal, and two associates-Russian citizen Natalia Bardakova, and New Jersey resident and U.S. citizen Olga Shriki-with one count of conspiring to violate and evade U.S. sanctions, in violation of the International Emergency Economic Powers Act.

   
 
 

Escalation of Ukraine War Effort Raises Risks to Russia's Putin at Home and Abroad

MOSCOW-Russia is planning triumphant ceremonies and public rallies as President Vladimir Putin prepares to formally annex a broad, additional swath of neighboring Ukraine in the coming days.

The celebrations are set to echo the pomp and circumstance that accompanied Russia's seizure of Ukraine's Crimean Peninsula eight years ago, an event that Mr. Putin marked in the imperial grandeur of the Kremlin's gilded St. George's Hall.

   
 
 

Twitter Co-Founder Dorsey Tried to Smooth the Way for Musk, Agrawal, Messages Show

Twitter Inc. co-founder Jack Dorsey tried to facilitate Elon Musk's relationship with Twitter's chief executive officer a day after the social-media platform accepted the billionaire's $44 billion takeover bid, according to text messages made public Thursday.

The messages, disclosed as part of a lawsuit in Delaware Chancery Court over Mr. Musk's stalled deal to take the social-media company private, show Mr. Dorsey praising CEO Parag Agrawal ahead of a proposed meeting at the end of April.

   
 
 

Barclays to Pay $200 Million SEC Fine Over Debt-Sale Snafu

Barclays PLC agreed to pay a $200 million fine to settle Securities and Exchange Commission charges stemming from a flubbed debt sale earlier this year.

The British bank had registered with the SEC to sell up to $20.8 billion in securities but sold some $38.5 billion worth instead. The flub involved the sale of structured notes, or debt instruments linked to an underlying reference such as the S&P 500 index, and exchange-traded notes.

   
 
 

Mark Zuckerberg Freezes Hiring at Facebook-Parent Meta

Facebook parent Meta Platforms Inc. has told employees that it will be implementing a hiring freeze and will be taking more steps to reduce the company's costs, according to people familiar with the matter.

CEO Mark Zuckerberg notified employees of the hiring freeze on Thursday during his weekly all-hands meeting. The announcement comes after The Wall Street Journal last week reported that Meta was planning to cut expenses by at least 10% in the coming months, including by trimming ranks.

   
 
 

Google to Shut Down Stadia Videogame Service

Google said it is shutting down Stadia, which launched in 2019, because the videogame service didn't have enough users.

"While Stadia's approach to streaming games for consumers was built on a strong technology foundation, it hasn't gained the traction with users that we expected," Phil Harrison, Stadia's vice president and general manager, said in a blog post.

   
 
 

Write to hoishan.chan@dowjones.com

   
 
 

Expected Major Events for Friday

04:30/NED: Aug PPI

04:30/NED: Aug Retail turnover

06:00/UK: 2Q Balance of Payments

06:00/UK: 2Q Business investment revised results

06:00/DEN: 2Q Revised GDP

06:00/DEN: Aug Unemployment

06:00/UK: 2Q UK quarterly national accounts

06:00/UK: Sep Nationwide House Price Index

06:30/SWI: Aug Retail Sales

06:45/FRA: Aug PPI

06:45/FRA: Aug Household consumption expenditure in manufactured goods

06:45/FRA: Sep Provisional CPI

07:00/SPN: Aug Retail Sales

07:00/HUN: Aug PPI

07:00/SWI: Sep KOF economic barometer

07:00/TUR: Aug Foreign Trade

07:55/GER: Sep Labour market statistics (incl unemployment)

08:00/BUL: Aug PPI

08:00/ITA: Aug Unemployment

08:30/UK: Aug Money and Credit - Lending to Individuals, Lending to Businesses, Broad Money and Credit

08:30/UK: Aug Monetary & Financial Statistics

08:30/UK: Aug Bank of England effective interest rates

09:00/CRO: Aug Industrial Production Volume Index

09:00/CYP: Aug PPI

09:00/GRE: Aug PPI

09:00/GRE: Jul Turnover Index in Retail Trade

09:00/ITA: Sep Provisional CPI

09:00/ITA: Sep Cities CPI

09:00/LUX: Aug PPI

09:00/CRO: Aug Retail trade

09:00/EU: Aug Unemployment

09:00/EU: Sep Flash Estimate euro area inflation

10:00/POR: Aug Retail trade

12:00/POL: 2Q Quarterly Balance of Payments

13:00/BEL: 2Q Balance of Payments

15:59/UKR: Aug Industrial Production

16:59/LUX: 2Q Balance of Payments

16:59/SPN: Aug Budget deficit

16:59/SPN: Jul Monthly Balance of Payments

16:59/BEL: Aug PPI

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(END) Dow Jones Newswires

September 30, 2022 00:22 ET (04:22 GMT)

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