MARKET WRAPS
Watch For:
Manufacturing PMI Data for EU, U.K. Italy, France, Germany; 4th
anniversary of Ursula von der Leyen taking over as EU chief; U.K.
nationwide House Price Index; Italy GDP; France OECD/UNDP Tax
Inspectors Without Borders annual report; trading updates from SAS,
Currys, Sasol, Remy Cointreau, ABB
Opening Call:
European stock futures were higher ahead of regional PMI data
and Fed Powell's speech. Asian stock benchmarks traded mixed after
China Caixin PMI data showed expansion, contrasting with the
official PMI data which signaled contraction. The dollar weakened;
Treasury yields steadied; oil futures fell while gold advanced.
Equities:
Stock futures in Europe rose early Friday on investor optimism
over easing inflation on both sides of the Atlantic and potential
Fed rate cuts next year.
Data Thursday showed annual eurozone inflation fell to 2.4% in
November, the lowest in more than two years.
But Brent Schutte, chief investment officer at Northwestern
Mutual Wealth Management cautioned that the market is getting it
wrong.
Instead of the Fed orchestrating a soft economic landing as many
investors now envision, Schutte expects rates to stay high until a
mild recession unfolds.
"Eventually, the Fed rate hikes are going to bite, but I don't
think they will remove them until they see them bite, meaning
slower economic growth and job losses."
Investors will be watching for Fed Chair Powell's speech later
today for more clues.
Forex:
The dollar weakened early Friday.
USD could retreat further as U.S. bond yields head lower,
benefiting Asian currencies, said Jeff Ng, head of Asia Macro
Strategy at SMBC.
Market participants will likely monitor Fed Chair Powell's
speech due later today for any potential pivot on the Fed's stance
toward monetary easing, Ng added.
Bonds:
Treasury yields were steady on signs of easing inflation and
renewed hopes for one or more rate cuts by the Federal Reserve in
2024.
New York Fed President John Williams on Thursday said he thinks
interest rates are at or near their peak.
"Fed officials have already acknowledged that inflation is
easing, and that can happen in the face of a strong economy and low
unemployment, essentially laying the groundwork for rate cuts,"
said Sonu Varghese, global macro strategist at Carson Group.
Energy:
Oil futures fell early Friday on skepticism from traders over
OPEC+'s additional voluntary production cuts.
"Investors remain concerned about OPEC compliance and global
demand growth as we head deeper into the seasonally soft winter
demand period," said Rob Haworth, senior investment strategy
director at U.S. Bank Asset Management Group.
Outside of Saudi Arabia, "OPEC members historically struggle in
compliance with planned cuts, leading to some market skepticism
about the actual magnitude of cuts that will be implemented."
Metals:
Gold rose on growing prospects that the Fed's tightening cycle
may be over, as indicated by the overnight U.S. economic data that
showed inflation continued to cool in October.
With seasonality on its side in December, the precious metal
could make another move higher to break record highs, said Matt
Simpson, market analyst at City Index and FOREX.com.
For December, gold has averaged a positive return of 1.15% over
the past 45 years, Simpson added.
--
Copper prices rose amid a stronger-than-expected China Caixin
manufacturing PMI and a shorter worker strike at Peru's Las Bambas
copper mine.
The end of the strike eased investor concerns over tighter
copper production, Nanhua Futures analysts said.
--
Iron ore futures were higher after the Chinese steel sector PMI
rose to 48.2 in November, beating expectations.
Steel demand has been subdued in China amid its property-market
weakness, but recently announced support measures boost
expectations of a rebound in demand, ANZ analysts said.
Meanwhile, iron ore prices will likely be supported by tight
supply, as there are signs that supply disruptions are emerging,
the analysts said.
TODAY'S TOP HEADLINES
China's Manufacturing Activity Expanded in November, Caixin PMI
Shows
A private gauge of China's factory activity unexpectedly swung
to expansion in November, contrasting with the official index that
signaled a contraction.
The Caixin manufacturing purchasing managers index rose to 50.7
in November from 49.5 in October, according to data released Friday
by Caixin Media Co. and S&P Global.
Powell won't endorse market expectations for quick rate cuts
Don't expect Federal Reserve Chair Jerome Powell to say anything
to bolster the market's rising expectations for interest-rate cuts
as soon as next March, economists said Thursday.
Powell is likely to "lean against against the notion that there
are cuts imminent," said Jonathan Millar, senior U.S. economist at
Barclays in New York.
OPEC+ Agrees to Significant Oil-Production Cut
OPEC+ agreed to a significant production cut of an additional
million barrels a day, delegates said, in a move that will likely
keep prices elevated amid the continuing conflict in the Middle
East.
As part of the deal reached Thursday, Saudi Arabia also agreed
to extend its cut of 1 million barrels a day that it announced in
June.
Fed's Williams says interest rates are 'at, or near' peak
The Federal Reserve's benchmark interest rate may have already
hit its peak level, as it is now putting more downward pressure on
the economy than at any time in the last 25 years, New York Fed
President John Williams said Thursday.
Earlier this month, the Fed kept its benchmark rate unchanged at
a level of 5.25%-5.5%.
Airbnb Is Conquering Italy. One City Is Fighting Back.
FLORENCE, Italy-The city of Botticelli's "Venus" and
Michelangelo's "David" is now the city of Airbnb.
The spread of short-term rentals has pushed up rents and priced
out residents. Shops that once served locals have become rarities.
Lockboxes for keys sit next to the doorbells at many buildings'
entrances.
Israel, Hamas Agree to Extend Truce for Another Day
TEL AVIV-Israel and Hamas agreed to extend a temporary truce in
Gaza for an eighth day, Egyptian officials said Thursday, in a deal
that is expected to involve the release of another 10 hostages,
mostly women and children.
Secretary of State Antony Blinken is visiting the region, where
he urged Israelis to extend the pause and reduce civilian
casualties if the fighting resumes. Blinken called for a civilian
"protection plan" that halts displacing Palestinians and designates
safe spaces including hospitals and other critical
infrastructure.
Meta's Threads to Launch in Europe in App's Biggest Expansion
Since Debut
Facebook parent Meta Platforms plans to launch Threads in Europe
in December, according to people familiar with the matter.
The launch represents Threads' largest market expansion since
its debut in July and signals the social-media company's commitment
to the microblogging service, which rivals that of Elon Musk's X,
formerly known as Twitter.
U.S. Leans on Turkey to Stop Supporting Hamas and Russia
ISTANBUL-The Biden administration's sanctions chief warned
Turkish officials that the country is fueling violence across two
continents by serving as a financing haven for Hamas and a trade
hub for Russia's war machine.
Despite U.S. sanctions targeting Hamas financiers over the past
decade, Turkey has allowed the group's investment firms, holding
companies, real-estate brokerages and a host of other businesses to
operate out of Istanbul, U.S. officials say.
Montana Judge Says TikTok Ban Likely Violates First
Amendment
TikTok won a reprieve in Montana after a judge ruled a state law
banning the app can't go into effect in January, saying it "likely
violates the First Amendment."
A federal judge on Thursday granted a preliminary injunction
blocking the law, which was passed by the Montana legislature
earlier this year, pending the outcome of a lawsuit filed by the
social-media company. The legality of the ban itself will be
decided later in a bench trial that has yet to be scheduled.
Nelson Peltz Launches Fresh Proxy Fight Against Disney
Activist investor Nelson Peltz announced a new proxy fight
against Disney after the company rebuffed his request to be added
to the board, starting the latest phase in the battle for the
entertainment giant's future.
Peltz's Trian Fund Management said Disney shareholders have lost
about $70 billion in value since the activist ended its first
campaign in February. Disney Chief Executive Bob Iger has stressed
in recent weeks that he is transitioning from a period of fixing to
one of building and that he has a plan to turn Disney into a modern
media company.
Write to singaporeeditors@dowjones.com
Expected Major Events for Friday
00:01/UK: Nov BRC-Sensormatic IQ Footfall Monitor
01:01/IRL: Nov Ireland Manufacturing PMI
06:00/NED: Nov Netherlands Manufacturing PMI
07:00/TUR: Nov Turkey Manufacturing PMI
07:00/UK: Nov Nationwide House Price Index
07:30/HUN: 3Q GDP
08:00/SWI: 3Q GDP
08:00/POL: Nov Poland Manufacturing PMI
08:00/CZE: 3Q GDP
08:00/AUT: 3Q GDP
08:15/SPN: Nov Spain Manufacturing PMI
08:30/CZE: Nov Czech Republic Manufacturing PMI
08:30/SWI: Nov procure.ch Purchasing Managers' Index
08:30/EU: Nov EuroCOIN indicator of euro area economic
activity
08:45/ITA: Nov Italy Manufacturing PMI
08:50/FRA: Nov France Manufacturing PMI
08:55/GER: Nov Germany Manufacturing PMI
09:00/ITA: 3Q GDP
09:00/GRE: Nov Greece Manufacturing PMI
09:00/EU: Nov Eurozone Manufacturing PMI
09:30/UK: Nov S&P Global / CIPS UK Manufacturing PMI
09:30/UK: 3Q Bank of England external business stats
10:00/CYP: Oct Retail trade
10:00/CYP: 3Q GDP
11:00/IRL: 3Q GDP
11:00/IRL: 3Q Balance of Payments
16:59/AUT: Nov Unemployment figures
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(END) Dow Jones Newswires
December 01, 2023 00:15 ET (05:15 GMT)
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