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China COVID woes, Fed minutes hit dollar, CZ's crypto fund - what's moving markets

Economy Nov 24, 2022 06:55AM ET
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By Geoffrey Smith 

Investing.com -- It's Thanksgiving, and U.S. stock markets are closed for a well-deserved rest. The rest of the world is giving thanks for a set of Fed minutes that strengthened the 'dovish pivot' narrative, squashing the dollar and U.S. bond yields and giving respite to battered currencies the world over. The big outlier is China, where the capital Beijing is heading back into lockdown in all but name, as COVID-19 cases hit a record high. European markets are higher after a surprise improvement in the Ifo index of German business confidence. And Changpeng Zhao promises more details on his crypto recovery fund. Here's what you need to know in financial markets on Thursday, 24th November.

1. Beijing heads back into lockdown as cases hit record

Beijing is back in lockdown in all but name.

In several of the Chinese capital's districts, people are being asked to work from home, while non-essential shops are shut and restaurants are open for takeaway only.

Case numbers have tripled in the last week to the highest on record, a pattern repeated across the country as tentative attempts to relax restrictions have inevitably brought about a rise in infections.

The offshore yuan, which has fallen nearly 2% in the last 10 days amid a growing wave of negative news on the health front, was broadly steady.

2. Dollar weakens on Fed minutes

The dollar weakened and 10-year Treasury yields tested a seven-week low after the minutes of the last Federal Reserve policy meeting showed a solid majority in favor of slowing the pace of interest rate increases amid growing signs of an economic slowdown.

Disinflation in housing and merchandise goods is in full swing, despite surprising strength in new home sales and durable goods reported on Wednesday.

By 06:20 ET, the dollar index, which tracks the greenback against a basket of developed economy currencies, was down 0.1% at 105.90, testing a three-month low, as sterling returned to levels last seen before the "Trussonomics" debacle. The 10-year Treasury yield was down 2 basis points at 3.69%, while the 2-year note was down 1 basis point at 4.47%.

3. European stocks advance on Fed minutes, Ifo improvement

With U.S. markets closed for the Thanksgiving holiday, the focus has been on Europe and Asia, where the trend has been generally positive, thanks to the Fed minutes.

The big standout has been China, where local indices fell by as much as 0.6% as the prospects for another economically damaging fight with COVID grew.

By 06:20 ET, the Euro Stoxx 600 was up 0.5% at its highest in over three months, as a rebounding euro promised some relief on the import cost front, reducing the pipeline pressure on inflation.

Also helping sentiment was an improvement in the German Ifo business climate, which corroborated the uptick in S&P's business survey on Wednesday. The 'expectations' component of the Ifo index rose particularly clearly, as the threat of gas rationing receded and the government's massive relief package moved closer to being enacted.

4. Binance to publish more details on crypto recovery fund

Binance CEO Changpeng Zhao said he will publish more details of his proposed fund to support the crypto industry in the wake of FTX's collapse.

Zhao had said there had been considerable interest in his idea during a Twitter spaces meeting earlier this month, despite the huge hit to confidence in the sector from revelations of excess, mismanagement, and alleged wrongdoing at FTX before it imploded.

Zhao's fund is ostensibly aimed at stopping contagion from bringing down healthy crypto companies. Skeptics have suggested that its ultimate intent is to protect Binance itself from becoming the next domino to fall. Zhao insists that Binance's financial stability is assured.

5. Oil down as China's COVID outlook darkens

Crude oil prices fell again as the COVID news out of China worsened. China has been the key swing factor in most forecasts for global demand this year and next, and the prospect of widespread lockdowns over the winter - or of a general collapse in consumer confidence if the virus is allowed to spread out of control - is still the biggest risk to those forecasts. Fears that the economic trouble could be compounded by civil unrest are also starting to grow, after violent protests at Foxconn's (TW:2354) iPhone factory in Zhengzhou earlier this week.

By 06:45 ET, U.S. crude prices were down 0.3% at $77.69 a barrel, while Brent crude was down 0.8% at $84.75 a barrel.

China COVID woes, Fed minutes hit dollar, CZ's crypto fund - what's moving markets
 

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Comments (12)
Assad Malikk
Assad Malikk Nov 25, 2022 3:16AM ET
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These are trying times for everyone and we sympathize with Europe and the rest of the world it’s a time we probably makes income by our self’s. only for a few with nice mind consciousness should notify Thank you..
Dave Jones
Dave Jones Nov 24, 2022 2:11PM ET
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What's moving the markets? Irrational exuberance.
Kerry Ditto
Kerry Ditto Nov 24, 2022 1:15PM ET
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pce keeps going up. so. how can fed pivot? no way. probably another 75 or 100 bps hike will be forced upon.
Kerry Ditto
Kerry Ditto Nov 24, 2022 1:10PM ET
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double troubles of mkt. China covid crisis again. powell's likely repetition of premature pivot. mkt's advance on false hope has to roll back.
PraksSsh PaTel
PraksSsh PaTel Nov 24, 2022 11:38AM ET
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will touch below $80?
Ted Dirty
DirtyTed Nov 24, 2022 10:47AM ET
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Many experts here...the big picture is that China needs cheap oil to boost back its economy. They already have the drill how to make it cheap.
Tre Hsi
Tre Hsi Nov 24, 2022 10:47AM ET
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cheap oil is nowhere to be found these days, that's why Xi is ********ed off at Putin.....despite the discount Russia is offering China, apparently China is paying Russia nearly 70% more in payments while only getting 10% more in oil and gas volume from Russia........
Ted Dirty
DirtyTed Nov 24, 2022 10:47AM ET
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Many experts here...the big picture is that China needs cheap oil to boost back its economy. They already have the drill how to make it cheap.
kiven Geldon
kiven Geldon Nov 24, 2022 8:30AM ET
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No travel restrictions for or from China tells me it's all fake news being pumped out.
Llewellyn Kruger
Llewellyn Kruger Nov 24, 2022 8:30AM ET
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What's more interesting is that China's dictator flew to a recent conference and was not wearing a mask and was shaking hands. Currently I am of the opinion that the lock downs in China are to control rioters without informing the world.
Tom Saltzman
Tom Saltzman Nov 24, 2022 8:29AM ET
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Covid is almost nonexistent in Africa where they do nothing to control it, and rampant in China where they stop at nothing. Just a tad fishy, No?
Brad Albright
Brad Albright Nov 24, 2022 8:29AM ET
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Covid testing is almost nonexistent in African nations.
Tre Hsi
Tre Hsi Nov 24, 2022 8:29AM ET
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sure, if you take this logic further, you can say HIV is nonexistent in Africa if you stop testing for it
Brad Albright
Brad Albright Nov 24, 2022 8:29AM ET
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In UK, there have been around 7 covid tests per person. In Egypt, a relatively developed African nation, its about 0.035 tests per person. You don't find what you don't seek.
Tom Saltzman
Tom Saltzman Nov 24, 2022 8:29AM ET
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Tre Hsi   Except lots people die from Aids in Africa, while very few if any are dying from covid. They do know what folks die from in Africa.
Joe Rizzuto
Joe Rizzuto Nov 24, 2022 7:38AM ET
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bogus manipulation by the fed. why was Bullard a few days ago talking up higher for longer when he knew the minutes from meeting 3 weeks ago were talking about slowing the pace? garbage! the fed should meet every month. minutes should be out the next day. fed bobbleheads can say whatever they want in between.
Tabish Anwar
Tabish Anwar Nov 24, 2022 7:38AM ET
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absolutely true.. they all are manipulating.everyone will go long...and fed comes out with 75bps in December may be
michel bovy
michel bovy Nov 24, 2022 7:38AM ET
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Tne Fed made already so many mistakes, CANNOT and should not change direction and totally loose credibility this time!!!
 
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