Ankur Banerjee previews the day’s trading in the European and international markets.
On Wednesday, the would-they-won’t-they drama surrounding the Fed’s potential suggestion that future rate increases will be gradual is set to come to a head. Though the market as a whole anticipates a fourth consecutive 75 basis-point increase, the question of what happens next has undoubtedly been on investors’ minds more lately.
The focus will be on remarks by Fed Chair Jerome Powell because numerous areas of the U.S. Treasury yield curve indicate a potential recession even while data continues to show a strong economy. Analysts believe there is a likelihood that the central bank will continue on its aggressive tightening path for rates due to the lack of any indicators of core inflation softening and the labour market’s continued tightness.
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According to ING experts, markets are looking for indications of a change. And that portends happiness if it is received, but anguish if it is not.
According to a poll of currency strategists, the U.S. dollar still has enough strength to resume its unrelenting rise despite the day’s decline and the fact that it has dropped from the over two-decade peak it reached in September. Investors are still hesitant to place bets on a long-lasting decline.
A day after social media rumours that China was considering relaxing its severe COVID controls next year caused a rapid rally, Hong Kong and Chinese equities kept rising in Asia.
The rumour was disproved, but it implies that damaged China shares were ready for a comeback on any indications of good news. Positive comments made by Chinese regulators at Hong Kong’s investment conference, the biggest business gathering there since its borders closed in 2020, also contributed to the positive mood.
In a tweet, Elon Musk, a billionaire and owner of Twitter, announced changes to the way accounts are verified in a tweet, announcing that the social media company will charge $8 per month for its Blue service, which includes the coveted “verified” badge.
Important events that could affect markets on Wednesday include:
German economic events The final October PMIs for Europe, the Fed’s two-day meeting, and October unemployment are all released at 1800 GMT.
Auctions: France, Spain, and the selling of German green bonds
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Ferrari (NYSE:RACE), GlaxoSmithKline (NYSE:GSK), the New York Times, Qualcomm (NASDAQ:QCOM), Inc., and eBay all have earnings to report (NASDAQ:EBAY).