The early morning stock market rally that stemmed from optimism that China was poised to deliver more stimulus and nearing a loosening of COVID restrictions did not last. ? Investors remain fixated on anything that involves inflation and most of those headlines are leading many to believe the Fed hawks might be proven right next quarter. One major inflation catalyst could be a rail strike that seems poised to get delayed until after the holiday. ? Congress appears positioned to block the strike that could deliver a devastating blow to the economy. ? With Fed Chair Powell’s discussion on the outlook and labor market happening tomorrow, Wall Street might not do much of anything the rest of the day as traders enjoy a pivotal World Cup match … [Read More...]

USD/JPY has reversed directions and posted gains on Friday, after three straight losing sessions. The yen is trading at 139.39, up 0.54% on the day. US markets are open for limited hours due to the Thanksgiving holiday, and there are no US releases on the schedule. Tokyo inflation hits 40-year high The caption above may sound dramatic, but inflation in Japan is far from the levels we’re seeing elsewhere, such as double-digits in the UK and the eurozone. Still, Japan finds itself dealing with rising inflation, after decades where deflation seemed a permanent part of the economic landscape. Tokyo Core CPI rose to 3.6% in November, nudging above the consensus of 3.5% and the consensus of 3.4%. This marked the highest reading since April 1982. There’… [Read More...]

Is an output hike really feasible? Oil prices are marginally higher on Wednesday, continuing the recovery from a sell-off that was triggered by speculation that OPEC+ could consider a significant hike in output when it meets early next month. The move would certainly come as a surprise considering its two million barrel cut last month, the deteriorating global economic outlook, Chinese Covid restrictions, and the uncertainty around the Russian oil price cap. Of course, the cap may be part of the reason for the discussions, if they have in fact taken place. Without the backing of Russia, that would create a whole new dynamic within the group, even threaten the “+” element of it which would be a big shock. Those rumours have been strongly … [Read More...]

US stocks are lower as the global growth picture takes a hit following key China Covid lockdowns and as the US economy could have to deal with a massive rail worker strike before the holidays. ? Adding to the risk aversion tone are rising concerns that future Russian attacks on Ukraine’s nuclear power supply could be catastrophic. Wall Street is hesitant to buy up risk assets on this World Cup-filled and shortened holiday trading week as the first wave of headlines from Beijing to a rail union vote seem likely to further fuel inflationary pressures. ? Trading activity could take a hit as many traders will enjoy focussing on the first round of games, but for now, it seems the pulse of Wall Street seems rather … [Read More...]

OANDA Senior Market Analyst Craig Erlam reviews the latest market news with Jonny Hart. They discuss the UK Autumn Statement and US economic data. [Read More...]

Jonny Hart looks back on the week’s business and markets news with OANDA Senior Market Analyst Ed Moya in New York.  This week they talk about commodities and cryptos. They address the fallout from the FTX, oil’s bad week, and how hawkish Fed speak put an end to gold’s rally.  They also discuss what the week ahead has in store for financial markets. [Read More...]

Oil steadies after strikes in Poland Oil prices are softer on Wednesday after a brief bout of volatility late Tuesday following reports of missile strikes in Poland. That unsurprisingly jolted financial markets, sending oil prices higher initially, but that quickly settled and crude prices are now back where they were before. It goes without saying that any significant escalation in the war in Ukraine will likely add a substantial risk premium to oil prices, with Russia being a major producer and exporter, as well as one of the leaders in the OPEC+ alliance. A strike on a NATO member is an extreme example of that and could send oil markets into a frenzy. Thankfully, the worst fears haven’t been realised but investigations are still taking place … [Read More...]

The British pound has reversed directions on Tuesday and posted sharp gains. In the European session, GBP/USD is trading at 1.1902, up 1.22%. The pound has punched above 1.19 for the first time since August 19th. UK wage growth a headache for BOE The UK employment report was soft, with unemployment ticking higher to 3.5%, up from 3.4%. Unemployment rose by 3.3 thousand, down from 3.9 thousand but well off the consensus of -12.6 thousand. The BoE will be most concerned about the increase in wage growth, which will create even more inflation, at a time when inflation is above 10%. Wages excluding bonuses rose to 5.7%, up from 5.5% and ahead of the consensus of 5.6%. There isn’t much slack to speak of in the labour market and the … [Read More...]

Bond yields marched higher after Fed’s Waller said the Fed has ‘a ways to go’ before pausing their rate hiking cycle. ? US stocks are declining after the latest Fed speak pushes back on the idea that the Fed is almost done hiking and after President Biden and Xi’s first in-person meeting delivered the standard rhetoric about avoiding a cold war. Obviously, this is just the beginning and the restart of talks between the world’s two largest economies, but it seems unlikely that we will see both sides cooperating anytime soon. ? Whether or not things take a turn for the better or worse will hinge on Secretary of State Blinken’s trip to China. ? Fed Fed’s Waller did his best to convince markets that rates … [Read More...]

Oil slides amid Chinese Covid restrictions Oil prices fell again on Wednesday, taking losses over the last couple of days to more than 5%. Brent and WTI are basically flat on the day at the time of writing, settling towards the lower end of their recent trading ranges. While the narrative in recent weeks has focused on the potential for Chinese Covid restrictions to be relaxed, which has driven Chinese equities higher and lifted oil prices, the reality has seen case numbers soaring, restrictions reimposed and mass testing undertaken. This doesn’t exactly add substance to the rumours and we may be seeing some unwinding of those positions. Gold steadies ahead of CPI data Gold has steadied over the last 24 hours or so after surging late last … [Read More...]