On Tuesday (December 13), Beijing time, the U.S. dollar traded around 105; Gold fell as the policy meeting concludes with a likely decision to slow the pace of rate hikes; oil rose about $2 as investors jittered about supply, with a key pipeline supplying the U.S. still shut and Russia threatening to cut production but easing The outlook for fuel demand was supported by COVID-19 restrictions.
Commodity closing situation:Brent crude futures settled at $77.99 a barrel, up 2.5%. U.S. crude futures settled at $73.17 a barrel, up 3%. U.S. gold futures fell 1 percent to settle at $1,792.30 an ounce.
U.S. stocks closed: The Dow Jones Industrial Average rose 1.58% to 34005.04 points; the S&P 500 rose 1.43% to 3990.56 points; the Nasdaq climbed 1.26% to 11143.74 points.
preview tuesday
Global Market Overview
U.S. stock indexes rallied on Monday to get off to a solid start to trading this week, helped in part by gains in Microsoft and Pfizer, as investors braced for Tuesday’s inflation data and the Federal Reserve’s policy decision later this week.
Microsoft rose 2.89 percent after the company said it would buy a 4 percent stake in London Stock Exchange Group (LSE), giving all three major indexes a boost. After strong gains in October and November, the benchmark S&P 500 slumped in December and suffered its biggest weekly percentage loss in nearly three months as mixed economic data fueled recessionary sentiment. worry.
Consumer inflation data due on Tuesday will be closely watched, with prices expected to rise 7.3 percent year-on-year in November, slowing from 7.7 percent in the previous month, with “core” inflation excluding food and energy seen at 6.1 percent , 6.3% the previous month.
Ken Polcari, managing partner of Kace Capital Advisors, said: “The market is currently pricing in a consumer price index (CPI) increase of 6 points tomorrow, while expectations are 7.3%. If it is 6 points, it will be enough to make everyone cause for excitement, at least in the short term. The other thing is they again expect Powell to be dovish, which would be a huge mistake. Powell needs to stop giving anyone the impression that they are softening their stance or It’s turning the doves away.”
All three major indexes posted their biggest one-day percentage gains since Nov. 30, with all 11 major S&P 500 sectors closing higher. Pfizer gained 0.85% after the company released its revenue forecast for various vaccines.
A weaker-than-expected inflation reading would help support the view that the Fed’s aggressive policy actions to slow the economy this year are working. The Fed is widely expected to raise interest rates by 50 basis points on Wednesday, which would mark a slowdown in the pace of rate hikes after raising rates by 75 basis points at the past four meetings.
Stocks ended lower on Friday after producer prices rose more than expected in November, although the data did suggest that the upward trend is slowing. Fears that the Fed will make policy mistakes and tip the economy into recession have weighed on U.S. stocks this year, with the S&P 500 down about 16 percent, on track for its first annual decline since 2018 and its biggest annual percentage loss since 2008.
precious metal
Gold prices fell on Monday as investors sat on the sidelines, awaiting U.S. inflation data and the Federal Reserve’s decision to raise interest rates later this week. Spot gold fell 0.9 percent to $1,780.19 an ounce. “Markets are pulling back ahead of the Fed meeting and the next few days will be quite volatile,” said Daniel Pavilonis, senior market strategist at RJO Futures.
The Fed is widely expected to raise rates by 50 basis points at its final meeting of 2022, scheduled for Dec. 13-14. The European Central Bank and the Bank of England are also due to announce interest rate decisions this week.
Data on Friday showed U.S. producer prices rose slightly more than expected in November, reinforcing the view that the Federal Reserve may have to keep interest rates higher for longer. Focus is now shifting to the U.S. November consumer price index (CPI) report due on Tuesday; U.S. Treasury Secretary Yellen predicted on Sunday that U.S. inflation will fall sharply in 2023.
Spot silver fell 0.7% to $23.30 an ounce. Platinum fell 2.2% to $999.73 an ounce and palladium fell 3.5% to $1,881.47.
Oil prices rose about $2 on Monday as investors jittery about supply, with a key pipeline supplying the U.S. still shut and Russia threatening to cut production, but the easing of coronavirus restrictions supported the outlook for fuel demand. Both indicators hit their lowest levels since December 2021 last week as investors worried that a possible global recession would hurt oil demand.
A possible long-term outage on TC Energy’s Canada-to-U.S. Keystone crude pipeline helped reverse price moves. “Repairs on the Keystone pipeline appear to be taking longer than expected, raising the possibility of further drawdowns at Cushing,” said Jim Ritterbusch of Ritterbusch and Associates.
Traders are concerned about how long it will take to clean and restart the Keystone oil pipeline. Last week, more than 14,000 barrels of oil leaked from the pipeline, the largest crude oil spill in the United States in nearly 10 years. The pipeline shutdown is expected to reduce supply at the storage hub in Cushing, Oklahoma, where U.S. benchmark crude futures are delivered.
Overall crude inventories were seen falling by about 3.9 million barrels in the week to Dec. 9, according to the average estimate of seven analysts polled by Reuters, according to a preliminary Reuters poll.
Brent crude, the global benchmark, could rebound and quickly rise above $90 a barrel on the back of a dovish Federal Reserve monetary policy and a “successful” restart of China’s economy, according to Bank of America Global Research.
foreign exchange
The dollar rose against most currencies on Monday in choppy trade, with key upcoming data expected to show U.S. inflation slowed in November from a year earlier and with the Federal Reserve likely to decide to slow the pace of interest rate hikes at the end of a two-day policy meeting.
The U.S. dollar index has fallen more than 8 percent since its peak in late September, and as the Fed slows its pace of rate hikes, yields on assets such as Treasuries will fall, making the greenback less attractive. In afternoon trade, the dollar rose 0.8% against the yen to 137.71.
The dollar also climbed against the Swiss franc, up 0.2 percent at 0.9348 franc. It was down 0.7 percent and 0.5 percent against the Australian and New Zealand dollars, respectively. The euro was flat at $1.0535. The euro has rallied nearly 8 percent so far in the fourth quarter, with investors betting the ECB would stick to its path of aggressive rate hikes.
Amo Sahota, executive director of Klarity FX, a foreign exchange consulting firm in San Francisco, said, “We have been feeling that the dollar has peaked, and we have felt that way for a few weeks. We think that since the peak in September and the test of the double top in late October, the dollar has The decline has already begun. This does not mean that the dollar will fall directly from current levels. It may remain high, but not close to the high, unless there is a new momentum.”
Data on consumer inflation for November, due on Tuesday, is expected to show core prices excluding food and energy rose 6.1% from a year earlier, down from 6.3% in October. “A weaker dollar is a signal that the market is expecting lower inflation and that the market is going to hear (Fed Chairman) Powell say that the Fed is cutting Its pace of rate hikes, the market is pricing in all of that.”
This week will also be the most intensive week of macro information this year. The four major central banks will hold their last policy meeting in 2022. The Federal Reserve, European Central Bank, Bank of England and Swiss National Bank are all due to announce interest rate decisions this week.
The Fed is widely expected to announce a 50 basis point hike this week, following a streak of 75 basis point hikes. Investors will be eagerly watching whether the Fed’s terminal interest rate forecast exceeds 5%. Currently, the fed funds futures market is predicting that rates will peak at 4.984% in May, the level at which the Fed will stop raising rates.
The dollar rose as much as 0.5 percent against the pound after official data showed the UK economy rose slightly more than expected in October from the previous month, but the outlook remained bleak. Economic output was hit by a one-off public holiday for Queen Elizabeth’s funeral in September. Sterling was last flat at $1.2270.
market news
EU foreign ministers meeting to focus on discussing the ninth round of sanctions against Russia
On December 12, local time, the EU Foreign Ministers’ Meeting was held in Brussels, the capital of Belgium. EU High Representative for Foreign Affairs and Security Policy Borrell said at a press conference after the arrival of the foreign ministers of the member states that the foreign ministers’ meeting will focus on the previous European Commission proposals. Discuss the ninth round of sanctions against Russia. According to the agenda, the meeting of the day started at 13:00 local time and is expected to end around 18:00 pm. After the meeting, the EU will hold a press conference to announce the results of the meeting.
“Fed megaphone”: The Fed enters the second phase of the battle against inflation, and the pace of interest rate hikes is expected to slow down
Nick Timiraos said that Fed Chairman Powell faces the challenge of formulating the next stage of interest rate policy. There are two main problems: how high to raise interest rates from now on, and how long to maintain interest rates at this level to overcome inflation. Nick Timiraos pointed out that the Fed’s battle against inflation includes three stages. The first stage involves raising interest rates from zero quickly enough to stop stimulating economic activity. After downplaying price pressures last year, Powell has raised rates by 75 basis points at each of the Fed’s past four meetings, winning the committee’s unanimous support for the last three moves. The Fed is now entering Phase 2, with officials expecting less rate hikes. Powell signaled last month that the Fed could raise interest rates by 50 basis points at its December meeting. In the third phase, the Fed will keep interest rates at an as-yet-undetermined higher level until inflation falls sharply to its 2% target. Most Fed officials expect to reach that level by next spring or summer.
UNCTAD: Global real GDP growth is expected to slow to 3.3% this year
According to the 2022 Statistical Handbook released by the United Nations Conference on Trade and Development on the 12th, the global real GDP growth rate will drop from 5.7% in 2021 to 3.3% in 2022. The UNCTAD report shows that in 2022, the growth rate of global merchandise exports and service trade exports will slow down. Growth in exports of goods is expected to slow to 13.8 percent in 2021 from 26.5 percent in 2021, while growth in services exports is expected to slow to 14.6 percent in 2021 from 17.2 percent in 2021. (CCTV)
EU approves 1.2 billion euros in economic aid for Ireland
On December 12, local time, the official website of the European Commission announced that the European Commission approved 1.2 billion euros in economic aid to Ireland. The announcement stated that the aid will be issued in the form of a loan guarantee, applicable to small and medium-sized enterprises with a total number of employees not exceeding 499, except for credit and financial institutions. (CCTV News)
The last price adjustment window within the next anniversary, oil prices are expected to usher in the “tenth drop”
The new round of domestic refined oil price adjustment window is at 24:00 on December 19, which will also be the last oil price adjustment in 2022, and agencies predict that there is a high probability that it will be lowered. As international oil prices continue to fall, the agency estimates that on December 9, the fourth working day, the rate of change in crude oil fell by 10.94%. The range is 0.39 yuan/liter to 0.44 yuan/liter, and it is expected to be 22 yuan cheaper to fill up a tank of fuel (50L) in a private car. According to the current decline estimate, if the international oil price continues to fall, then No. 95 gasoline is expected to fall below 8 yuan per liter. (Yangzi Evening News)
Energy storage battery companies are busy expanding production and going overseas, and large capacity is becoming the main direction of upgrading
On December 12, news from the High-Tech Energy Storage Annual Conference showed that global energy storage battery shipments will reach approximately 125GWh in 2022, a substantial increase of over 160% from 48GWh in the previous year. Industry insiders call 2022 the “true first year” of electrochemical energy storage. Looking forward to the next three to five years, the industry generally expects that the overall scale of the industry will maintain a compound annual growth rate of more than 50%. Safety and cost are the core elements of the industry’s attention. Expansion of production, going overseas and increasing the capacity of batteries are obvious trends in business operations. (Securities Times)
Goldman Sachs to lay off hundreds of workers again, more than usual
Goldman Sachs (GS.N) plans to cut at least hundreds more jobs. The Wall Street giant is restructuring its struggling consumer business and preparing for an uncertain economic year ahead. The bank is drawing up plans to potentially cut at least 400 jobs from its loss-making retail banking business, according to people familiar with the matter. Goldman Sachs Chief Executive David Solomon has said he is scaling back the firm’s consumer banking ambitions. Goldman Sachs sheds some underperforming employees every year, and the latest layoffs show that the bank has outgrown its usual layoffs. Solomon also said recently that he is evaluating other lines of business to manage headcount and limit costs.