Stock market finds massive U.S. data to set the tone before the holiday Reuters

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© Reuters. File photo: On January 21, 2021, outside a brokerage company in Tokyo, Japan, a man wearing a protective mask stands in front of an electronic board displaying the Nikkei index during the coronavirus disease (COVID-19) outbreak. REUTERS/Kim Kyung-Hoon

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Author: Hugh Jones

LONDON (Reuters)-As crude oil prices boosted oil companies, the stock market regained some of its lost ground on Wednesday, but the increase in COVID-19 cases in Europe, weak economic sentiment in Germany and a bag of US data before Thanksgiving were the focus of investors’ attention.

The STOXX index of 600 European companies rose 0.4% due to fears of a lockdown caused by rising infection rates in continental Europe, rebounding from a three-week low touched on Tuesday. The index traded around 481 points, only about 10 points from the all-time high set last week.

The MSCI World Stock Index was flat at 749 points, about 10 points below the historical high a week ago

Mike Hewson, chief market analyst at CMC Markets, said: “People are trying to determine whether this week’s decline is the beginning of a pullback, a lower test, or just uncertainty driving the flow.”

“The biggest concern is the further blockade, which is the dominant sentiment factor, and what impact will this have on the ECB’s policy,” Hewson said.

Germany’s Ifo business confidence index in November was 96.5, while Reuters generally predicted 96.6.

Ifo said that the decline in business morale in Europe’s largest economy is worrying. As companies deal with supply chain bottlenecks, growth is expected to stagnate in the fourth quarter.

Later in the day before the Thanksgiving holiday on Thursday, investors will face a large amount of US data, including the PCE index, which is an inflation index closely watched by the Federal Reserve.

Inflation in the United States has soared to a three-year high, and the minutes of the Fed’s last meeting will also be carefully studied to find clues as to whether the central bank will accelerate the reduction of its bond purchase stimulus plan at next month’s meeting.

Sim Moh Siong, a foreign exchange strategist at the Bank of Singapore, said: “The Fed may accelerate its contraction, which in turn means that the tightening timetable may be brought forward, thereby pushing the dollar stronger.”

UniCredit Bank told customers that investors will pay attention to the minutes of the meeting to see if the differences between doves and hawks are widening.

Asian stock markets are nervous due to rising US Treasury yields and fluctuations in oil prices due to price cooling in the United States and other countries.

The MSCI Asia Pacific’s broadest index outside of Japan fell 0.14%, while the Japanese benchmark stock index fell 1.6%, as investors returned from vacation and caught up with the previous day’s decline in global stock markets. Chinese blue chip stocks strengthened slightly. As the Fed’s interest rate speculation heated up, the U.S. dollar rose, https://fingfx.thomsonreuters.com/gfx/mkt/zjpqkwzyxpx/Fed.PNG

Crude oil prices rise, oil stocks

The rise in oil prices continued the gains of the previous trading day, because after repeated calls to increase crude oil failed to affect OPEC+ producers, investors still doubted the effectiveness of the US-led release of oil from strategic reserves to cool prices.

Futures reversed the early decline and rose 0.5% to US$82.71 per barrel, while futures rose 0.6% to US$78.93 per barrel.

Stable oil helps boost European oil company stocks

Overnight, the yield rose by more than 5 basis points (bps) to a high of 1.684%, and then fell back to 1.6531%. The two-year U.S. Treasury bond yield fell, reaching its highest level since March 2020 on Monday. [US/]

Otherwise, the money market will pause for respite on Wednesday, as the U.S. dollar has basically maintained its recent gains against most of its peers, supported by rising U.S. Treasury yields.

The U.S. dollar traded at 115.05 yen after hitting a four-and-a-half-year high of 115.22 yen.

Interest-free gold, which did not respond well to the rise in US Treasury yields, rebounded slightly. The spot price was last reported at US$1,792, an increase of 0.16%, but it was still close to Tuesday’s two-week low. [GOL/]

Driven by inflationary pressures and the relaxation of coronavirus restrictions to support economic activity, the Bank of New Zealand raised interest rates for the second time in several months on Wednesday.

However, the New Zealand dollar fell 0.45% to 0.69180 US dollars as the market was open to the possibility of more substantial interest rate hikes.

The Turkish lira remains under pressure, falling 2.3% to 12.52 against the dollar after a historic plunge on Tuesday, as President Tayyip Erdogan defended the recent interest rate cut and vowed to win his “war of economic independence.”

As the crisis intensified, the lira fell sharply, https://graphics.reuters.com/TURKEY-LIRA/klpykdrakpg/chart_eikon.jpg

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