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Stocks, US Futures Are Steady Before Fed Minutes: Markets Wrap

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(Bloomberg) — European stocks and US equity futures were steady as investors awaited the release of policy minutes from the Federal Reserve’s latest meeting for insights on the path of rate hikes.

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The Stoxx Europe 600 held near a three-month high, as basic resources and energy stocks gained. Credit Suisse Group AG dropped after warning of a fourth-quarter loss. Contracts on the S&P 500 edged higher after the underlying gauge closed at its highest level since Mid-September on Tuesday. Nasdaq 100 futures were little changed.

Shares in Manchester United Plc jumped in US premarket trading after the owners of the historic English football club said they were exploring options that could lead to a sale. An index of Asian shares rose. Market trading volumes are expected to be lighter, given the US Thanksgiving holiday on Thursday.

A gauge of dollar strength pared declines, with New Zealand’s currency among the strongest performers against the greenback after the country’s central bank raised rates by the most on record. Ten-year US Treasury yields dropped by one basis point.

The publication of minutes from the Fed’s Nov. 1-2 meeting — due at 2 pm in Washington — will be studied for how united policymakers were over a higher peak for interest rates than previously signaled in their fight against inflation. Some investors anticipate that lower-than-estimated inflation figures could prompt the Fed to temper the size of its rate hikes as early as next month’s gathering.

“Since the meeting, the market has swung in its anticipation of what could happen in December, and this week’s minutes could help to confirm the Fed’s intent,” said economists at Rand Merchant Bank in Johannesburg. “The risk to the markets from the minutes is that they appear less hawkish than expected, which could drive an unwind of some of the rate-hike risk repricing we saw at the end of last week.”

European investors digested data showing that private-sector activity in Germany and France — the euro area’s top two economies — contracted in November, painting a bleak picture for a region that may already be in recession.

Meanwhile, a gauge measuring Euro-area activity in manufacturing and services unexpectedly rose in November, signaling that businesses see tentative signs that the region’s economic slump may be easing as record inflation cools and expectations for future production improve.

In Asian trading, Hong Kong tech shares sawsawed before consolidating their advance as investors weighed the implications of a report that Ant Group Co. faces a fine of more than $1 billion from China’s central bank. The news triggered speculation that this could mark a potential end point of the government’s clampdown on tech and may allow Alibaba Group Holding Ltd. to rekindle efforts to list Ant shares

Bitcoin held recent gains after rising as much as 4.2% Tuesday to lift the digital asset from its lowest price since November 2020.

Oil rose as traders awaited further details of a plan to cap Russian crude prices and assessed the outlook for demand in Covid-hit China.

Key events this week:

  • S&P Global PMIs: US, Euro area, UK, Wednesday

  • US MBA mortgage applications, durable goods, initial jobless claims, University of Michigan sentiment, new home sales, Wednesday

  • Minutes of the Federal Reserve’s Nov. 1-2 meeting, Wednesday

  • The ECB publishes an account of its October policy meeting, Thursday

  • US stock and bond markets are closed for the Thanksgiving holiday, Thursday

  • US stock and bond markets close early, Friday

Some of the main moves in markets:

Stocks

  • The Stoxx Europe 600 rose 0.2% as of 9:20 am London time

  • Futures on the S&P 500 were little changed

  • Futures on the Nasdaq 100 were little changed

  • Futures on the Dow Jones Industrial Average were little changed

  • The MSCI Asia Pacific Index rose 0.3%

  • The MSCI Emerging Markets Index rose 0.4%

Currencies

  • The Bloomberg Dollar Spot Index was little changed

  • The euro was little changed at $1.0310

  • The Japanese yen was little changed at 141.37 per dollar

  • The offshore yuan fell 0.3% to 7.1612 per dollar

  • The British pound was unchanged at $1.1886

Cryptocurrencies

  • Bitcoin rose 2.6% to $16,547.03

  • Ether rose 3.2% to $1,165.89

Bonds

  • The yield on 10-year Treasuries declined one basis point to 3.75%

  • Germany’s 10-year yield was little changed at 1.99%

  • Britain’s 10-year yield declined four basis points to 3.10%

Commodities

  • Brent crude rose 0.9% to $89.17 a barrel

  • Spot gold fell 0.2% to $1,737.05 an ounce

This story was produced with the assistance of Bloomberg Automation.

–With assistance from Richard Henderson.

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