Global stocks headed for highest level in more than 2 months after Fed minutes

39
2
Global stocks headed for highest level in more than 2 months after Fed minutes

On Thursday, a gauge of global stocks headed for the highest level in more than two months, after Federal Reserve meeting minutes showed support for tapering interest-rate increases.

Australian and Japanese equities climbed and share futures for Hong Kong indicated a second day of gains for Asia. The US and European contracts also advanced after the S&P 500 closed at a two-month high Wednesday before the Thanksgiving holiday.

Treasury yields fell and the dollar dropped back to a three-month low during the US trading session. The dollar lost ground in early Asian trading. Due to the US holiday, there will be no trading in Treasuries.

The Fed gathering earlier this month indicated that several officials backed the need to moderate the pace of rate hikes, even as some underscored the need for a higher terminal rate.

It adds weight to expectations that the central bank will raise rates by 50 basis points next month, ending a run of jumbo 75 basis point increases. Data Wednesday showed that US business activity contracted and unemployment applications rose as the economy cools.

Oil dropped to near a two-month low as traders assessed a higher than expected price cap on Russian crude and a surprise build in US products.

There are signs of new monetary stimulators that may tempered the negative impact of rising Covid 19 cases in China. Officials said Wednesday that the People's Bank of China would allow banks to reduce capital reserves to stimulate growth.

Gita Gopinath, first deputy managing director of the International Monetary Fund, said in an interview with Bloomberg Television that China's zero-Covid policy has had a significant impact on consumption, while the property crisis is affecting investment in the sector and affecting property developers.

Some of the biggest moves in markets are:

The Japanese yen rose by 0.1% to 139.43 per dollar.

The story was produced with the help of Bloomberg Automation.

None of Sears Limps Through What Could Be Its Final Holiday Season