MARKET WRAPS
Watch For:
France consumer confidence survey; U.K. GDP, balance of
payments, monthly retail sales figures, business investment revised
results; trading updates from DS Smith
Opening Call:
Shares look set to retreat in Europe on Friday, with the
market's attention trained on the coming release of the U.S.
Federal Reserve's favorite inflation indicator. In Asia, stock
benchmarks rose; Treasury yields ticked up; the dollar was slightly
flat; while oil and gold both gained.
Equities:
European shares could be off to a wobbly start on Friday, as
investors await a fresh reading of the Fed's preferred inflation
measure due later in the day.
The core personal-consumption-expenditures price index for
November is projected to have risen 0.1% from October and 3.3% from
a year ago.
A round of U.S. economic data Thursday--first-time jobless
claims and third-quarter gross domestic product--weren't
"earth-shattering numbers, " but they still proved that a cooling
economy will keep the Fed on track to cut rates in the
"not-too-distant future," said Morgan Stanley.
Forex:
The dollar was steady after earlier losses in the wake of the
downward revisions in U.S. GDP.
Sterling is expected to decline in the near term on growing
expectations the Bank of England will cut interest rates in the
first half of 2024 as U.K. inflation eases, said MUFG.
"The faster decline in inflation poses downside risks to our
near-term pound forecasts," it said.
Markets have fully priced in a BOE rate cut in May, Refinitiv
data showed.
Bonds:
Treasury yields inched higher after carving out another
multi-month low overnight on the slight downward revision in U.S.
third-quarter GDP.
"Fedspeak has been exhausted for the year and efforts to
convince investors that a March rate cut is just too soon will
resume in the New Year," said BMO Capital Markets.
"Not only is there little on the immediate horizon to inspire a
rethink of the prevailing macro narrative, even a modest slowing of
the real economy in the beginning of 2024 would only serve to
reinforce the bond-bullish price action," it said.
Energy:
Oil prices rebounded in Asia after being pressured by Angola's
decision to leave the Organization of the Petroleum Exporting
Countries.
The price weakness was due to concerns about how Angola's
departure may affect OPEC's unity, said Saxo.
Crude oil prices have also strengthened on the recent shipping
disruptions in the Red Sea due to Houthi rebel-led attacks.
Metals:
Gold prices were slightly higher on continued bets that the Fed
would start lowering rates next year.
The SOFR market--a broad measure of the cost of borrowing cash
overnight collateralized by Treasury securities--has raised 2024
rate-cut expectations, said Saxo Bank.
Gold typically moves inversely to interest rates.
Continued demand for the haven asset from both central banks and
retail buyers in Asia is also supporting prices, Saxo Bank
added.
---
Copper prices were higher amid concerns about supply constraints
and better sentiment across the commodity market.
The Fed's recent dovish pivot on monetary policy and a weaker
dollar have propped up copper prices, Huafu Securities said.
On the supply side, after Panama ordered First Quantum to shut
down its flagship copper mine, there have been concerns about
future copper supply, it said.
Amid the positive macro environment, low inventories could
support copper prices in the short term, it added.
---
Iron ore prices were higher amid improved sentiment across
commodity markets.
Given strong domestic macroeconomic expectations, overall market
sentiment is picking up, Baocheng Futures said.
However, thinning margins have forced many Chinese steel mills
to halt production for more maintenance, leading to lower demand
for iron ore, it said.
The weak fundamentals for iron ore have limited its gains and
iron-ore prices will likely continue to fluctuate, it added.
TODAY'S TOP HEADLINES
What to Watch in Friday's Spending Report: Inflation Closing In
on Fed's Target
Inflation retreated further in November and consumers picked up
their spending as moods improved, forecasters said, adding to signs
that price pressures can be contained without a recession.
Economy still appears headed for recession, U.S. leading index
signals
The numbers: The leading economic index declined 0.5% in
November, falling for the 20th month in a row, and continued to
signal a recession ahead.
Economists polled by the Wall Street Journal had forecast a 0.5%
drop in the leading index, a gauge of 10 indicators designed to
show whether the economy is getting better or worse.
U.K. Serious Fraud Office Must Pay Mining Company After Botched
Corruption Probe
The U.K.'s Serious Fraud Office must pay Eurasian Natural
Resources Corp. after it began a corruption investigation based on
tips improperly obtained from a senior lawyer for the company, a
U.K. court said.
The SFO committed a "serious breach" of its own duties by
privately communicating with a lawyer then at Dechert, a law firm
hired by the company to run an internal investigation into possible
bribery, Justice David Waksman of the High Court in London said
Thursday in a written judgment. Without those communications, the
agency wouldn't have launched its investigation, Waksman found.
Israel Signals It Could Agree to Palestinian Authority Governing
Gaza After the War
Israeli Prime Minister Benjamin Netanyahu's national security
adviser indicated that Israel could accept a U.S. plan for a
revamped Palestinian Authority to govern the Gaza Strip after the
war, a sign that the Israeli leader is easing his opposition to the
idea.
"Israel is aware of the desire of the international community
and the countries of the region to integrate the Palestinian
Authority the day after Hamas, and we make it clear that the matter
will require a fundamental reform of the Palestinian Authority,"
Tzachi Hanegbi, who heads Israel's National Security Council, wrote
in an opinion piece published Thursday on the Arabic-language news
site Elaph.
Elon Musk tells Cathie Wood he wants to create a 'giant brain'
and financial platform on X
Elon Musk says he hopes to turn X into a "giant brain" and pivot
it into a financial platform once it secures money-transfer
licenses.
"We want to create a group mind or collective consciousness
where each person is reporting information to the system, and
giving their opinion. Think of it as a giant brain," Musk said in a
wide-ranging, 100-minute interview with Cathie Wood, chief
executive of investment-management firm ARK Invest, on X's Spaces
app Thursday.
Write to singaporeeditors@dowjones.com
Expected Major Events for Friday
00:01/UK: Nov Zoopla House Price Index
00:01/UK: Dec CBI Growth Indicator and Service Sector Survey
00:01/UK: Nov UK monthly automotive manufacturing figures
05:30/NED: 3Q GDP - 2nd estimate
06:00/FIN: Nov Labour force survey, incl unemployment
06:00/FIN: Nov PPI
07:00/UK: Nov UK monthly retail sales figures
07:00/UK: 3Q Balance of Payments
07:00/UK: 3Q Business investment revised results
07:00/DEN: Nov Central Government Finance & Debt
07:00/SWE: Nov Retail sales
07:00/UK: 3Q UK quarterly national accounts
07:00/DEN: Nov Retail sales index
07:00/DEN: 3Q Revised GDP
07:00/NOR: Nov Credit Indicator C2
07:00/GER: Nov Foreign trade price indices
07:45/FRA: Nov PPI
07:45/FRA: Dec Consumer confidence survey
08:00/SWE: Nov PPI
08:00/SPN: 3Q Final GDP
09:00/ICE: Nov Harmonized CPI
09:00/ICE: Nov Labour Force Survey
09:00/ICE: Nov PPI
09:00/ITA: Dec Consumer Confidence Survey
09:00/ITA: Dec Business Confidence Survey
09:00/POL: Nov Unemployment
10:00/ITA: Nov Foreign Trade non-EU
10:00/LUX: Oct Trade
10:30/BEL: Dec CPI
11:00/ITA: Oct Industrial turnover
11:00/IRL: Nov WPI
13:00/POL: Nov Broad money M3
14:00/BEL: Dec Business Confidence Survey
15:59/UKR: Nov PPI
15:59/UKR: 3Q Unemployment
16:59/HUN: 3Q Balance of Payments
16:59/SPN: Nov Budget deficit
16:59/SPN: 3Q Quarterly Balance of Payments
16:59/BEL: Nov PPI
All times in GMT. Powered by Onclusive and Dow Jones.
Write to us at newsletters@dowjones.com
We offer an enhanced version of this briefing that is optimized
for viewing on mobile devices and sent directly to your email
inbox. If you would like to sign up, please go to
https://newsplus.wsj.com/subscriptions.
This article is a text version of a Wall Street Journal
newsletter published earlier today.
(END) Dow Jones Newswires
December 22, 2023 00:15 ET (05:15 GMT)
Copyright (c) 2023 Dow Jones & Company, Inc.
FTSE 100
Index Chart
From Jun 2024 to Jul 2024
FTSE 100
Index Chart
From Jul 2023 to Jul 2024