S&P 500 and Nasdaq push higher as commodities rally

The local currency rose 1.3% to over US67¢. The Bloomberg Cash Dollar Index slipped 1.3%; the index is poised for its biggest weekly loss since March 2020.

On bitstamp.net, bitcoin was 4.1% lower at US$16,712 as of 6:05 a.m. AEDT; it briefly traded below US$16,500 earlier. The cryptocurrency fell 19% last week, extending its year-to-date decline to over 63%.

On Friday, crypto exchange FTX filed for bankruptcy proceedings in the United States and Sam Bankman-Fried resigned as CEO, after a rapid liquidity crisis within the cryptocurrency group caused the intervention of regulators around the world.

The yield on the US 10-year note remained unchanged at 3.81%. There were no cash trades in US government bonds due to Veterans Day.

Nobel Prize-winning economist Paul Krugman sees good reason for the Federal Reserve to consider pausing interest rate hikes to assess the effects of its hikes on the US economy so far this year.

“My view is that the Fed has probably done enough already, and they should really, really pause and wait and see,” Krugman said on Bloomberg Television’s “Balance of Power” with David Westin. “If we get another good CPI report, then there’s going to be a lot of soul-searching at the Fed, saying, ‘Are we really being too hawkish? “”

Boston Fed Chair Susan Collins said the central bank still had work to do to get inflation under control, but the risks of the US central bank going too far have risen after a series of sharp rate hikes of interest.

“I think as we’ve raised rates, the risk of over-tightening has increased,” Collins said Thursday during an interview with Bloomberg in Providence, Rhode Island.

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Next week’s agenda

Local: The RBA will release its final meeting minutes on Tuesday; Third quarter price index by age on Wednesday, November labor force data on Thursday.

Overseas data: The UK government’s autumn economic update is due out on Thursday; China to release October retail sales and industrial production data on Tuesday; US to release retail sales early Thursday; a series of Federal Reserve policymakers are expected to speak.

Market Highlights

ASX futures up 28 points or 0.39% at 7190 around 6:00 AEDT

  • AUD +1.3% to 67.07 US cents
  • Bitcoin -4.1% to US$16,712 as of 6:05 am AEDT
  • On Wall St around 2:05 p.m.: Dow -0.1% S&P +0.8% Nasdaq +1.9%
  • In New York: BHP +6.2% Rio +6.6% Atlassian +2%
  • Tesla +2.2% Apple +1.7% Amazon +4.3% Netflix +4.6%
  • In Europe: Stoxx 50 +0.6% FTSE -0.8% CAC +0.6% DAX +0.6%
  • Spot gold +0.5% at US$1,764.95/oz at 2:05 p.m. New York
  • Brent +1.7% to $95.28 a barrel
  • Iron ore +4.7% to $92.25 per ton
  • 10-year yield: United States 3.81% Australia 3.65% Germany 2.15%
  • Price in the United States at 2:04 p.m. in New York

United States

Both short-term and long-term US consumer inflation expectations rose in early November, while sentiment fell to a four-month low amid rising borrowing costs.

Consumers expect prices to rise at an annual rate of 3% over the next five to 10 years, up from 2.9% in October and the highest in five months, the preliminary survey showed on Friday. November from the University of Michigan. They see costs rising 5.1% over the next year, compared to 5% last month.

The sentiment index fell to 54.7, worse than any Bloomberg survey forecast, from 59.9 in October.

“The continuing uncertainty about inflation expectations suggests that such entrenchment in the future is still possible,” Joanne Hsu, the survey’s director, said in a statement.

Data was collected from October 26 to November 26. 9, before a key government inflation gauge showed consumer price growth slowed in October more than expected.

Europe

European stocks posted their best weekly performance in nearly eight months on Friday.

The STOXX 600 index ended the session up 0.1% to an 11-week high, with financials, mining and retail stocks leading the gains.

The index posted weekly gains of 3.7%.

China-exposed luxury giants Hermes International, Kering and LVMH jumped between 2.4% and 2.8%. Richemont also climbed 10.5% on better-than-expected sales and margins.

European base resources jumped 2.6% as base metal prices soared.

Goods

Almost all major commodities traded higher following China’s decision to reduce the time travelers and close contacts of infected people must spend in quarantine, a significant amendment to the Covid Zero policy.

New York oil futures rose 4.2%. Copper, precious metals and agricultural commodities, from corn to wheat, all climbed.

“Fundamentally, the longer China can restart its economy, the greater the positive impact on global growth expectations,” said Keith Wildie, head of trade at Romco Group.

“But crucially, China has always been an exporter of deflationary pressures and if we see that deflationary force returning to the global economy, then the positive impact on commodity prices and asset markets in general could be exceptionally important in the short term.”

Base metals traded on the London Metal Exchange surged, with zinc climbing as much as 6.4% and aluminum gaining 3.8%. In the United States, Chicago soybean futures saw the biggest intraday rise in a month.

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