EU retail trade; Germany manufacturing orders, manufacturing
turnover; UK Bank of England's financial stability report, narrow
money (notes & coin) and reserve balances, construction PMI;
annual OECD revenue statistics; trading updates from Siemens
Energy, Siemens AG, TUI, British American Tobacco
Shares could open slightly higher in Europe on Wednesday. In
Asia, stock benchmarks were mostly up; Treasury yields rose
slightly; the dollar weakened; oil was mixed; while gold inched
European stocks seem poised for mild gains on Wednesday, as
investors digest the possibility of rate cuts next year by the
European Central Bank and U.S. Federal Reserve, as well as Moody's
decision to downgrade its outlook on China's debt.
"A Moody's decision to cut the Chinese credit outlook raised
concerns over the sustainability of the country's fiscal pathway.
The shift onto a 'negative' outlook highlights concerns that its
current fiscal spending habits pose a risk to the economy," Scope
Meanwhile, data showed that job openings in the U.S. fell in
October to a 28-month low, which may play into expectations that
the Fed is done with its interest-rate hikes.
"Markets should expect demand and supply for labor to come
closer into balance, which should solidify expectations the Fed is
done tightening, suppressing yields and supporting risk appetite,"
LPL Financial said.
The Fed will wrap up its next policy meeting on Dec. 13. It is
expected to leave interest rates unchanged at a range of 5.25% to
The dollar lost some ground in Asia amid divergent signals.
Mild gains in U.S. stock-index futures could support risk
appetite, while mostly higher Treasury yields may underpin the
appeal of U.S. fixed-income assets and demand for the
Meanwhile, the dollar's carry advantage seems to be providing
support, along with a sudden shift in market expectations of ECB
rate cuts in recent weeks, RBC Capital Markets said.
Treasury yields eked out some gains, following losses amid
expectations that major central banks will cut rates in 2024 and
the possibility of a swifter-than-expected U.S. economic
Multiple factors appeared to be at play during the previous
day's session. One was expectations for a rate cut next year by the
European Central Bank. Another is the decision by investors and
traders to remove some term premium - or compensation that had been
demanded for the risks of holding longer-term debt to maturity and
was put into place earlier this year.
The third factor the market is weighing is the possibility of an
unexpectedly faster U.S. economic slowdown that could morph into a
growth scare and undermine expectations for a soft landing,
Oil futures were mixed after edging higher earlier in the
session in a likely technical rebound after settling at their
lowest level since July.
Analysts said gains may be capped.
Market participants remain unconvinced that supply reductions by
OPEC+ will be fully implemented, ANZ Research said.
The lack of detail on new quotas leaves open the possibility of
producers not adhering to their voluntary reductions, it added.
"The OPEC+ decision was a clear disappointment last week due to
both the underwhelming amount of additional [oil] output curbs and
the voluntary nature of the 2024 policy cuts," said Sevens Report
Gold ticked higher, supported by mild weakness in the dollar,
which typically has an inverse correlation with the precious
The outlook for gold futures in the coming months is mostly
contingent on the dollar, CBA said.
But there is probably a limit to the dollar's weakness being
tied to Fed rate-cut expectations next year, it added.
This is because if expectations increase to 150bps worth of rate
cuts by end-2024, as CBA forecasts, that would be consistent with a
mild U.S. recession, it said. Under that scenario, the dollar
should strengthen, it added.
Copper prices rose, boosted by supply concerns and hopes for
commodities support from Beijing.
Moody's affirmation of its long-term A1 rating on Chinese
sovereign bonds could "help spur government support, which could
ultimately boost demand for copper and other commodities," ANZ
It added that investors remain concerned about Panama's decision
to shut down a mine that produces about 1.5% of global copper
supply, which has already led to lower Chinese smelter fees "amid
concerns of increasing competition for supplies."
Iron ore futures were higher amid supply growth constraints.
ANZ noted that Brazilian iron-ore exporter Vale plans to keep
its production of the steel-making material steady next year and
expects to produce around 310 million-320 million tons in 2024
versus this year's 315 million tons.
Vale's decision signals a broader shift among iron-ore producers
to concentrate on margins instead of volumes amid slowing demand in
China, ANZ said.
The constraints on supply growth will likely keep the market
relatively tight and support prices, it added.
TODAY'S TOP HEADLINES
Job openings fall to 28-month low as U.S. labor market cools
The numbers: Job openings in the U.S. fell in October to a
28-month low of 8.7 million, adding to evidence that the labor
market is cooling off in response to higher interest rates.
Job listings sank from a revised 9.4 million in September, the
Labor Department said Tuesday.
Rio Tinto Plans $6.2 Billion Investment in Guinea Iron Ore
Rio Tinto's single biggest investment over the next few years is
likely to be a huge African iron ore project that could reshape
global supplies of the steelmaking ingredient.
The world's second-largest miner by market value said Wednesday
it expects to contribute roughly $6.2 billion to the initial
development of the Simandou mine, including port and rail
infrastructure needed to export the ore.
Europe Faces New Terrorism Threat Fueled by Israel-Hamas War
PARIS-Europe's security services are confronting a resurgence of
terrorism threats, in a sign of how fallout from the Israel-Hamas
war is rippling across the West.
Radicals pledging allegiance to Islamic State have carried out
three attacks on European soil-killing two people in France and one
in Belgium-since the Oct. 7 attack by Hamas militants spurred
Israel's bombing campaign and ground invasion of the Gaza Strip.
Images of the war-beamed to screens across the continent and
flooding social media-are stirring Islamist radicals to lash out,
European officials say, sometimes with deadly effect.
Putin Seeks Closer Middle East Ties in Rare Overseas Visit
Russian President Vladimir Putin heads to the Middle East this
week in a rare overseas trip focused on global oil markets, the
conflict between Israel and Hamas and the war in Ukraine, analysts
say, seeking to widen any gap between the U.S. and the key power
brokers in the strategic region.
It will be a brief visit. On Wednesday, Putin is scheduled to
travel to both Saudi Arabia and the United Arab Emirates, where he
is aiming to strengthen Russia's relationships as Moscow grapples
with the impact of Western sanctions. The following day, Putin will
host Iranian President Ebrahim Raisi in Moscow, deepening ties that
were bolstered last year when Tehran began supplying military
drones for Russia to use in Ukraine.
Senators Are on Collision Course in Ukraine-Aid Vote
WASHINGTON-Senate Democrats and Republicans were headed for a
showdown over a $111 billion foreign-aid package that includes
money to back Ukraine in its war with Russia, as longstanding
differences over border policy proved too contentious to quickly
Senate Majority Leader Chuck Schumer (D., N.Y.) lined up an
initial vote related to the package Wednesday, but the broken state
of the talks meant it was likely headed for defeat. The White House
has warned that the U.S. wouldn't be able to keep providing weapons
to Ukraine if Congress doesn't act before the end of the year.
Russia Rejects 'Significant Proposal' to Trade for WSJ's
Gershkovich, Whelan, U.S. Says
WASHINGTON-U.S. negotiators made a fresh offer to Russia in
recent weeks to secure the release of detained Americans Evan
Gershkovich and Paul Whelan, but Moscow rejected the American
proposal, the U.S. State Department said Tuesday.
The offer involved trading prisoners, people familiar with the
matter said, but they didn't offer further details.
Elon Musk's AI Startup Seeks to Raise $1 Billion
Elon Musk's artificial-intelligence company, xAI, is looking to
raise $1 billion, according to a new SEC filing.
Musk launched xAI in July, with the company saying its mission
is "to advance our collective understanding of the universe." Musk
spent months recruiting researchers and has envisioned the new
effort as becoming a rival to OpenAI, whose ChatGPT sparked an AI
frenzy in the tech industry.
Apple is a $3 trillion company again, for the first time since
Apple Inc. is once again worth $3 trillion, hitting that
milestone Tuesday for the first time in more than four months.
Shares of Apple AAPL closed up 2.1% in Tuesday's session, giving
the company a market capitalization of $3.01 trillion. The company
hasn't been valued in $3 trillion territory since Aug. 3, according
to Dow Jones Market Data.
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Expected Major Events for Wednesday
07:00/ROM: Oct Retail trade
07:00/GER: Oct Manufacturing orders
07:00/GER: Oct Manufacturing turnover
07:00/NOR: 3Q Balance of Payments
07:30/HUN: Oct Retail Sales
07:30/HUN: Oct Preliminary Industrial Production
08:00/SVK: Oct Internal trade, incl Wholesale & Retail
08:00/CZE: Oct Retail trade
08:00/AUT: Nov Wholesale Price Index
09:30/UK: 3Q Household Finance Review
09:30/UK: Nov S&P Global / CIPS UK Construction PMI
09:30/UK: Nov Narrow money (Notes & Coin) and reserve
10:00/EU: Oct Retail trade
10:00/GRE: 3Q Provisional GDP
10:00/LUX: Nov CPI
11:00/IRL: Nov Monthly Unemployment
16:59/POL: Polish interest rate decision
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(END) Dow Jones Newswires
December 06, 2023 00:16 ET (05:16 GMT)
Copyright (c) 2023 Dow Jones & Company, Inc.
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