By Geoffrey Smith
Investing.com — It’s Thanksgiving and U.S. stock markets are closed for a well-earned rest. The rest of the world gives thanks for a series of Fed minutes that bolstered the “dovish pivot” narrative, crushing the dollar and U.S. bond yields and giving battered currencies around the world a break. The big outlier is China, where the capital Beijing is returning to lockdown in all but name, as COVID-19 cases hit an all-time high. European markets are higher after a surprise improvement in the Ifo index of German business confidence. And Changpeng Zhao promises more details about his crypto recovery fund. Here’s what you need to know in financial markets on Thursday, November 24.
1. Beijing returns to lockdown as cases hit record high
Beijing is back in lockdown in all but name.
In several areas of the Chinese capital, people are being asked to work from home, while non-essential shops are closed and restaurants are open for take-out only.
The number of cases tripled last week to the highest level on record, a trend that has been repeated across the country as tentative attempts to ease restrictions have inevitably led to a spike in infections.
The , which has fallen nearly 2% in the past 10 days amid a growing wave of negative news on the healthcare front, has remained broadly stable.
2. Dollar weakens on Fed minutes
The dollar weakened and 10-year Treasury yields hit a seven-week low after the Federal Reserve’s latest policy meeting showed a solid majority in favor of slowing the pace of increases amid signs crescents of an economic slowdown.
Housing and goods disinflation is in full swing, despite surprising strength announced on Wednesday.
As of 6:20 a.m. ET, the , which tracks the greenback against a basket of currencies from developed economies, was down 0.1% at 105.90, testing a three-month low, returning to levels seen for the last time before the “Trussonomics” debacle. The note lost 2 basis points to 3.69%, while the note lost 1 basis point to 4.47%.
3. European stocks rise on Fed minutes, Ifo improves
With US markets closed for the Thanksgiving holiday, attention shifted to Europe and Asia, where the trend was generally positive, thanks to Fed minutes.
The big standout was China, where local indices fell 0.6% as the outlook for another economically damaging bout with COVID rose.
As of 6:20 a.m. ET, the price was up 0.5% to its highest level in more than three months as a rebound promised some relief on the import cost front, reducing pressure on the pipeline.
The improving index also helped boost sentiment, which corroborated Wednesday’s rise in the S&P Business Survey. The “expectations” component of the Ifo index rose particularly sharply, as the threat of gas rationing receded and the government’s massive relief plan moved closer to being enacted.
4. Binance will release more details on the crypto recovery fund
Binance CEO Changpeng Zhao said he will release more details about his proposed fund to support the crypto industry in the wake of FTX’s collapse.
Zhao said his idea garnered considerable interest during a Twitter Spaces meeting earlier this month, despite the huge blow to confidence in the industry following revelations of excess, mismanagement and of alleged wrongdoing at FTX before it imploded.
Zhao’s fund apparently aims to prevent contagion from bringing down healthy crypto companies. Skeptics have suggested that his ultimate intention is to prevent Binance from becoming the next domino to fall. Zhao insists that Binance’s financial stability is assured.
5. Oil drops as China’s COVID outlook darkens
Crude oil prices fell again as COVID news from China worsened. China has been the main tipping factor in most global demand forecasts this year and next, and the prospect of widespread lockdowns over the winter – or a general slump in consumer confidence if the virus is allowed to spread out of control – is still the biggest risk to these predictions. Fears that the economic turmoil could be compounded by civil unrest are also starting to grow, following violent protests at Foxconn’s (TW:) iPhone factory in Zhengzhou earlier this week.
As of 6:45 a.m. ET, prices were down 0.3% to $77.69 a barrel, while they were down 0.8% to $84.75 a barrel.
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