Morning Brew November 2 2022

Good Morning

Ahead of the FOMC rate decision tonight, higher than expected job openings in the US – a number normally not closely watched – spooked traders hoping for dovish tones. US 10 Year Yields rose to above 45 again and the USD Index gained while equities gave up gains. US Indexes closed lower, with the Dow Jones slipping 0.24%, the S&P 500 0.41% and the Nasdaq 0.89%.

The overall expectation among analysts polled by Reuters is that we are likely to retest the USD Highs again, only 32% expect the Dollar to decline from here.

There seems to be some expectation for an intervention out of the BoJ around the FOMC so the Yen is on the move.

Looking at the FOMC, the expectation for a 75 BPS hike stands at 99%, takin the implied rate to 3.8%. The peak rate at the moment is seen at 5% in May 23 and any shift there will have a significant impact on market sentiment.

The rate decision is at 19:00 tonight due to the daylight savings time difference and the Press conference by Jerome Powell at 19:30.

Headlines:

Uber up 12% on good results

Reports that China may be considering loosening Covid restrictions boosted sentiment

HKEX has issue a notice that HKEX, including Stock Connect and its derivatives market will be suspended at 13:55 local time and there is no After-Hours Trading Session.

Oil prices rose more than 1% on Wednesday after industry data showed a surprise drop in U.S. crude inventories

Germany is likely to decide on subsidies to industry and households to deal with high energy costs

Economic data:

Wednesday: EU PMI, DE unemployment, FOMC Rate decision

Thursday: UK PMI and Rate decision, EU Unemployment, US PMI,

Friday; EU PMI, US Nonfarm Payrolls

Earnings:

Wednesday: Novo Nordisk, GSK, Booking, Qualcom, CVS,

Thursday: ConocoPhillips Cigna Corp, Amgen, Paypal, Starbucks, EOG, DBS,