By Geoffrey Smith
Investing.com — A big data dump is brewing, with U.S. housing starts, jobless claims and the Philadelphia Fed survey all due at 08:30 ET (13:30 GMT). Various Federal Reserve officials are lining up to offer their views on the interest rate outlook in the hours that follow. Grain prices fell after Russia and Ukraine renewed their agreement on safe passage for Ukrainian exports for another 120 days, while comments from the Pentagon on Wednesday hit oil prices, sparking speculation that which the United States could pressure Ukraine to accept the peace talks. Stocks are set to open with losses after another weak update from NVIDIA fallen angel. And the UK has the chance to tell the bond markets how sorry it is for this unfortunate flirtation with fiscal madness in September. Here’s what you need to know in financial markets on Wednesday, November 17.
1. US data dump and Fed speakers galore
The United States releases weekly and monthly data from the Philadelphia Federal Reserve in a market that was forced to reassess its recent rally on Wednesday by a stronger-than-expected report for October.
Late Wednesday, Federal Reserve Governor Chris Waller added his voice to others suggesting that a cut of just 50 basis points at the Fed’s next meeting would be acceptable, given signs of widening. which may have peaked. Even so, other comments by San Francisco Fed Chair Mary Daly, alluding to a “terminal” federal funds rate of over 5%, underscored that the Fed’s tightening cycle is far from over. to be finished.
Fed Governors and will speak later, alongside the Cleveland Fed Chairman.
2. Renewed grain deal pushes wheat to 2-month low
World prices fell to their lowest level in more than two months after Russia and Ukraine agreed to extend the agreement protecting food exports from Ukrainian ports for another 120 days.
The announcement dispelled fears that Russia might walk away from the deal after making angry noises about it following a Ukrainian attack on the Kerch Strait bridge last month. Doubts over the deal had also deepened after the explosion of a Ukrainian air defense missile in Poland which briefly threatened to escalate the war in Ukraine.
The agreement does not appear to include guarantees for the export of Russian ammonia from the port of Odessa, which Moscow had demanded. This could keep pressure on global ammonia prices and restrict global fertilizer supplies next year, putting longer-term upward pressure on crop prices.
3. Fixed stocks for lower opening; NVIDIA disappoints again, while Tencent causes China to rout
U.S. stock markets set to open lower again after a strong October retail sales report cast doubt on the narrative that weaker demand will force the Fed to quickly end hikes rate.
The mood – especially in tech – isn’t helped by another set of weak numbers from NVIDIA (NASDAQ:), which showed how pandemic-era twin bubbles in video games and mining cryptocurrency broke out. The sell-off in Chinese tech stocks is also weighing on sentiment, prompted by Tencent’s (HK:) announcement on Wednesday that it was dumping its stake in Meituan (HK:) in a move that has been interpreted as a signal that its Battles with Beijing regulators aren’t over. it’s not over yet.
As of 6:10 a.m. ET, were down 148 points, or 0.5%, while and were down alongside. The had lost 1.5%, while the was down 0.1%, and was down 0.8% on Wednesday.
Most of the day’s US results come after the bell, with reports from Applied Materials (NASDAQ:), Palo Alto Networks (NASDAQ:), Ross Stores (NASDAQ:) and Gap (NYSE:).
4. UK to unveil new budget plans
The UK government will release its tax and spending plans for next year, desperately trying to undo the damage caused by Liz Truss’s reckless bet on cutting taxes.
As bond markets have rallied since Truss was replaced as prime minister by Rishi Sunak, Bank of England Governor Andrew Bailey told parliament on Wednesday that it will take time in the UK to restore its reputation for economic competence.
Chancellor of the Exchequer Jeremy Hunt is expected to announce a significant tightening of fiscal policy, split 60/40 between spending cuts and tax hikes, to put public debt back on a medium-term downward path. Among the various pitfalls he will have to negotiate are massive backlogs in the National Health Service, wayward public sector unions and the rising cost of servicing the UK’s inflation-linked debt.
5. Report on falling oil inventories in China, comments Milley
Crude oil prices hit a three-week low as China continues to buy more oil than its economy actually needs at the moment, and on hopes that this week’s events in Ukraine may yet end to hostilities.
Mark Milley, the US Joint Chiefs of Staff, told a news conference that an outright military victory for Ukraine was not likely in the near term, fueling speculation that pressures backstage on Ukrainian President Volodymyr Zelensky to moderate the conditions he has set for peace talks with Russia.
As of 6:20 a.m. ET, futures were down 1.6% at $84.20 a barrel, while futures were down 1.2% at $91.75 a barrel.
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