NEW YORK (Dow Jones) — US stock markets are likely to start trading at a discount on Monday. The futures on the S&P 500 fell 0.6 percent premarket. The focus remains on the interest rate policy of the US Federal Reserve. In Asia, however, the Chinese stock exchanges have made strong gains. The reason for this was the new easing of the strict corona measures in the second largest economy in the world. However, analysts warn that China is continuing to adhere to the zero-Covid policy. Therefore, the local steps outside of China had not provided any support either.
On Friday, US labor market data, which were significantly better than expected, unsettled investors and fueled concerns about the US Federal Reserve’s continued tight interest rate policy. Not only was the increase in jobs well above expectations, hourly wages also increased noticeably more than forecast. This could give the Fed reason to keep interest rates tight to combat high inflation, it said. However, there is still an around 80 percent probability of a US interest rate hike of 50 basis points and not around 75 basis points in the coming week.
US economic data due after the starting bell could provide impetus. In addition to the purchasing managers’ index for the service sector in November in second reading, the ISM index for the non-manufacturing sector, also for November, is on the agenda. In addition, industrial new orders data will be released for October.
Oil Prices Rise – Dollar Lighter
Oil prices are increasing significantly. The prices for the Brent and WTI grades rose by 2.8 percent each. The Opec+ alliance has agreed to stick to its oil production targets, two days after the Group of Seven (G7) leaders agreed on a price cap for Russian oil. In the run-up, it was said that they were considering increasing the production volume. Opec and Russian-led allies decided to keep production cuts of 2 million barrels a day agreed in October. The corona easing in China is also having a supportive effect, which means that demand for oil is expected to increase.
On the foreign exchange market, the dollar shows a little lighter. The dollar index is down 0.3 percent. The dollar’s rise after better-than-expected US jobs data for November was short-lived. This suggests that the dollar will not revisit this year’s high and will most likely weaken in 2023, according to Ipek Ozkardeskaya, an analyst at Swissquote.
In the bond market, yields are recovering from Friday’s losses. The 10-year yield rose 2.4 basis points to 3.52 percent. The price of gold has changed little. The price of the troy ounce is 0.1 percent lighter.
Tesla at discounts
Among the individual values, Tesla gave up 3.6 percent before the market. According to agency reports, the US electric car manufacturer wants to reduce production at its plant in Shanghai due to falling demand.
Apple stock almost unchanged. In recent weeks, Apple has accelerated plans to move some of its manufacturing out of China, people involved in the discussions told The Wall Street Journal. The company has urged its suppliers to more actively plan the assembly of Apple products in other Asian countries, particularly India and Vietnam, and reduce dependence on Taiwan’s assembly plants led by Foxconn Technology, it said. The Foxconn plant in Zhengzhou, China, was rocked by violent protests in late November.
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US Bonds
Term Yield Bp to VT Yield VT +/-Bp YTD
2 years 4.30 +1.2 4.29 357.0
5 years 3.69 +3.4 3.66 243.1
7 years 3.62 +2.9 3.59 218.4
10 years 3.52 +2.4 3.49 200.7
30 years 3.55 +0.6 3.55 165.3
FOREX last +/- % Mon, 8:08 Fri, 17:21 % YTD
EUR/USD 1.0586 +0.4% 1.0564 1.0480 -6.9%
EUR/JPY 143.09 +1.0% 142.55 141.87 +9.3%
EUR/CHF 0.9895 +0.2% 0.9885 1.0637 -4.6%
EUR/GBP 0.8604 +0.3% 0.8579 0.8562 +2.4%
USD/JPY 135.15 +0.6% 134.94 135.37 +17.4%
GBP/USD 1.2306 +0.2% 1.2313 1.2241 -9.1%
USD/CNH (Offshore) 6.9334 -1.1% 6.9516 7.0441 +9.1%
Bitcoin
BTC/USD 17,251.84 +0.9% 17,306.56 16,913.72 -62.7%
ROHOEL last VT-Settlem. +/- % +/- USD % YTD
WTI/Nymex 82.22 79.98 +2.8% +2.24 +18.7%
Brent/ICE 87.95 85.57 +2.8% +2.38 +21.4%
GAS VT Settlem. +/- EUR
Dutch TTF 133.27 135.56 -1.7% -2.29 +114.7%
METALS last day before +/- % +/- USD % YTD
Gold (Spot) 1,796.49 1,797.80 -0.1% -1.31 -1.8%
Silver (Spot) 23.03 23.13 -0.4% -0.10 -1.2%
Platinum (Spot) 1,021.35 1,018.50 +0.3% +2.85 +5.2%
Copper Future 3.85 3.85 +0.1% +0.00 -12.6%
YTD relative to previous day’s close
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(END) Dow Jones Newswires
December 05, 2022 08:35 ET (13:35 GMT)
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