A mixed start for shares after the Fed warning & China’s property plan – Daily Market Brief, November 14, 2022

DAX & EURO Stoxx50 are set to rise, tracking Asia higher after Beijing revealed a plan to rescue the troubled property sector. Meanwhile, US futures point lower after Fed Waller warns on rates.

·         Hang Seng is on the verge of a bull market, up almost 20% from October 31

·         G20 summit starts today with Biden and XI Jinping set to meet

·         BTC/USD continues to fall, dropping 3% as the fallout from FTX continues

US stocks booked impressive gains last week, the Nasdaq jumped over 8%, and the S&P 500 rose just shy of 6%. Meanwhile, the USD dropped 4% in value against a basket of its major peers.

Cooler-than-expected inflation and core inflation prompted a huge market reaction as investors priced in a less hawkish Federal Reserve. Following the data last week, Fed speakers also suggested that it might be appropriate to adopt a less aggressive stance to rate hikes.

Fed speak

Federal Reserve official Christopher Waller warned over the weekend that the US central bank’s fight against inflation isn’t over. He said that interest rates would keep going up despite prices cooling by more than expected. He said that the market should now focus on the endpoint for interest rates in this cycle rather than the pace of each move. He added that the endpoint was still a way off.

His comments have lifted the US dollar at the start of the week, although USD/JPY remains below 140.00. Meanwhile, US futures are pointing to a modestly weaker start to trading.

Hang Seng

The picture in Asia overnight was more upbeat, with Chinese stocks rising and the Hang Seng adding to last week’s impressive surge after Chinese authorities unveiled sweeping plans to rescue the ailing property market, sending property developer stocks soaring. The announcement comes after Beijing eased some COVID controls on Friday. Finally, it appears that Beijing is taking concrete steps to tackle the two most significant risks for the market, zero-COVID and the property crisis. As a result, the Hang Seng is on the verge of a bull market, up almost 20% from its October 31 low.

Europe is taking its cue from Asia, pointing to a firmer start on the open. The DAX is set to rise 0.3% as it hovers around a 5-month high. Meanwhile, the EURO Stoxx50 is set to rise 0.4% and sits at a 7-month high.

The economic calendar is light, with just Eurozone industrial production in focus, which is expected to rise 0.3% MoM in September, up from 1.5% in August.

G20

Attention will also be on the start of the G20 summit in Indonesia, where President Biden and China’s Xi Jinping are set to meet for the first time face-to-face since Biden’s inauguration. While the G20 itself isn’t usually a market-moving event, investors are expected to pay close attention to the meeting.

Crypto selloff

After a bruising week last week, which saw cryptocurrencies across the board tumble following the collapse of FTX, the selloff continues on Monday. BTC/USD trades down a further 3%, below 16k, as confidence lies in tatters and attention turns to crypto.com amid growing scrutiny towards exchanges. Recent developments highlight the need for regulation across the industry, and those calls are expected to grow louder as the fallout from FTX continues.

Disclaimer: This article is not investment advice or an investment recommendation and should not be considered as such. The information above is not an invitation to trade and it does not guarantee or predict future performance. The investor is solely responsible for the risk of their decisions. The analysis and commentary presented do not include any consideration of your personal investment objectives, financial circumstances, or needs.

Sources: Bloomberg, CNBC, Reuters

Original article provided by Trading Writers

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