MARKET WRAPS
Watch For:
U.K. CPI, PPI; trading updates from British Land, Severn Trent, Sage Group
Opening Call:
European stock futures were largely higher as markets await Nvidia's results later today. The dollar and Treasury yields steadied; while oil was mixed and gold gained.
Equities:
Stock futures were mostly higher early Wednesday after an escalation in Ukraine tensions rattled markets overnight.
Nvidia's earnings report due today after the U.S. market close is in focus. The world's most valuable company is expected to show rapid growth in earnings per share, but admittedly at a slower pace than in past quarters. Investors will be looking for whether the company can continue to beat estimates.
U.K. inflation data is also on tap later today. Alan Taylor, the most recently appointed member of the Bank of England's monetary policy committee, told lawmakers that a gradual pace of cuts would involve a cumulative reduction in the key rate of one percentage point in 2025.
Forex:
Trump trade, which had boosted the greenback, is facing challenges from Trump's controversial cabinet nominations and the escalation in the Russian-Ukraine tensions, DBS said.
The DXY Index retreated after hitting the significant resistance level of 107, DBS noted. "A break below 106 in the DXY, especially on lower U.S. bond yields, could fuel more recovery in the commodity currencies if U.S. bond yields start paying attention to the Fed again," the bank said.
Bonds:
Rising Ukraine/Russian tensions have driven investors to seek the safety of U.S. government debt. The developments triggered a global flight to safety, with bond yields falling across the developed world. The benchmark 10-year Treasury yield, which had been rising toward 4.5% in recent weeks, fell to 4.3%. Yields also fell in Germany, Japan and the U.K.
"What we've seen...is that markets continue to look towards the Treasury market as a risk off, kind of safe haven trade," said Lawrence Gillum, chief fixed income strategist at LPL Financial. "So if things escalate further...there's a real good reason why Treasury yields would move lower."
Energy:
Oil was mixed in Asia amid rising geopolitical tensions in Europe.
Ukraine conducted an attack on a border region in Russia using its newly granted long--range missile capabilities, CBA's Vivek Dhar noted. "Russia responded by approving an updated nuclear doctrine that expands the conditions for using nuclear weapons," Dhar added.
Metals:
Gold's appeal as a safe-haven asset has been supported by escalating geopolitical tensions, particularly the ongoing conflict between Russia and Ukraine, said FlowCommunity commercial director Tito Iakopa. Concerns over trade uncertainties and U.S. fiscal sustainability may also provide support for higher gold prices, Iakopa said.
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Iron-ore prices rose amid positive sentiment. The government of China's Guangzhou city has expanded its program to buy up old apartments, which the market has read as a positive sign of demand for construction-related materials, Baocheng Securities said.
Despite the policy boost to prices of the steelmaking material, fundamentals haven't changed much, Baocheng said. Investors should watch China's policies cautiously and take into consideration the impact of a possibly weaker yuan in the near future, it added.
TODAY'S TOP HEADLINES
American Companies Are Stocking Up to Get Ahead of Trump's China Tariffs
By 9 p.m. on election night, it had become clear to Jason Junod that Donald Trump was returning to the White House. That night, he contacted his skin-care company's suppliers in China to order a year's worth of inventory for about $50,000-as much as he could afford to buy and had room to store.
His hope is that the roughly 30,000 body brushes and exfoliating gloves make it to Bare Botanics' facility in Madison, Wis., before Inauguration Day. He thinks Trump is serious about his campaign promise to impose tariffs of 60% on all Chinese goods.
Why the Fed's December Decision Just Got Complicated
Complicating the Fed's December rate-cut decision is the growing divide between the bulk of the economy that has sailed smoothly through the central bank's anti-inflation campaign and the important corners of the landscape that haven't.
Much of the business world has powered through the past three years without missing a beat, impervious to the highest benchmark interest rates in 16 years. That has kept stock prices high, job losses low and employees' incomes rising faster than inflation.
Volkswagen Chooses Rivian's Kjell Gruner to Lead U.S. Business
Volkswagen said Rivian Automotive executive Kjell Gruner will lead its U.S. business, a week after teaming up with the electric-vehicle startup in a $5.8 billion deal.
The German car maker said Gruner would take over as chief executive of Volkswagen's America operations on Dec. 12 from Pablo Di Si, who requested to step down last week. Gruner most recently served as chief commercial officer at Rivian and has experience at Porsche AG, DaimlerChrysler and Mercedes-Benz Cars.
EU Approaches a Forced Labor Ban
The European Union is one step closer to completing a long-awaited bloc-wide ban on the sale of products made with forced labor.
The Council of the EU on Tuesday approved a regulation that would forbid throughout the bloc's 27 member states the sale of goods made with forced labor either within Europe or outside it. The law now goes to the presidents of the European Parliament and the council for signatures.
Here's what bond and gold traders are signaling about Russia's nuclear shift
Traditional flight-to-safety trades took off on Tuesday in response to the worsening conflict between Russia and Ukraine, but a closer look at the extent of the bond market's moves and a rise in gold prices reveal traders were probably less rattled than initially thought.
Tuesday's rally in the 30-year bond BX:TMUBMUSD30Y, for instance, briefly pushed its corresponding yield down by as much as 8 basis points. That's a magnitude similar to what was seen during Monday's bond-market selloff, when the long-dated rate jumped on mostly technical repositioning. Bond prices and yields move opposite to each other.
Rio Tinto Says Sexual Harassment, Racism Still Happening at Miner
Rio Tinto is finding it difficult to stamp out sexual harassment, racism and bullying as it faces resistance and backlash from some workers to its efforts to overhaul the culture of one of the world's biggest miners.
That is a key finding of a report published on Wednesday that assessed Rio Tinto's response to an external review in 2021 that unearthed reports of frequent bullying by managers, racist comments and sexual assault.
Nvidia earnings are on deck. Here are the 5 big things to know.
Can Nvidia Corp. again wow Wall Street when it reports earnings on Wednesday afternoon?
There are various factors to keep in mind heading into the report, including a decent rally in Nvidia shares NVDA since the last report, which stands at odds with action among many other chip stocks over that period. Plus, there's the sensation that this quarter itself isn't so important for the Nvidia narrative, as investors look ahead to the broader ramp of the company's new Blackwell chip.
Write to singaporeeditors@dowjones.com
Expected Major Events for Wednesday
07:00/UK: Oct UK producer prices
07:00/UK: Oct CPI
07:00/GER: Oct PPI
07:00/DEN: 3Q Preliminary GDP
09:30/UK: Sep UK House Price Index
10:00/EU: Sep Construction output
10:00/LUX: Oct Unemployment
11:00/POR: Oct PPI
11:00/UK: Oct Aluminium Production report
11:00/IRL: 3Q Labour Force Survey
15:59/GRE: Sep Balance of Payments
17:59/POR: Sep ICSG Copper Report
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(END) Dow Jones Newswires
November 20, 2024 00:00 ET (05:00 GMT)
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