According to minutes of the US Federal Reserve Open Market Committee (FOMC) monetary policy meeting on November 1-2, “A substantial majority of participants judged that a slowing in the pace of [interest rate] increase would likely be appropriate.”
In US economic data, durable goods orders rose by 1.0% in October (survey: +0.4%). New home sales lifted 7.5% to an annualised 632,000 rate in October (survey: -5.5%). The S&P Global manufacturing index fell from 50.4 to 47.6 in November (survey: 50). The S&P Global services index eased from 47.8 to 46.1 in November (survey: 48). The University of Michigan consumer sentiment index fell from 59.9 to 56.8 in November (survey: 55). Initial jobless claims rose by 17,000 to 240,000 last week (survey: 225,000). MBA mortgage applications rose by 2.2% in the past week.
European sharemarkets closed higher on Wednesday as gains in travel and leisure (+1.9%) and mining (+1.8%) stocks offset losses in Credit Suisse (-6.1%) after its profit warning. The S&P Global eurozone composite purchasing managers’ index (PMI) rose from 47.3 to 47.8 in November (survey: 47). The continent-wide FTSEurofirst 300 index lifted by 0.6% and the UK FTSE 100 rose by 0.2%.
US sharemarkets advanced on Wednesday after meeting minutes from the US Federal Reserve showed that most central bank officials back a slowing in the pace of interest rate hikes. Shares of the world’s largest farm equipment maker Deere & Co jumped 5.0% to a record high after reporting a higher-than-expected quarterly profit. Shares
of Tesla lifted 7.8% after Citigroup upgraded the electric-vehicle maker’s stock to “neutral” from a “sell” rating. But shares of 3D design software maker Autodesk slipped 5.7% after cutting forecasts for annual billing and free cash flow. At the close of trade, the Dow Jones index was up by 96 points or 0.3%. The S&P 500 index rose by 0.6% and the Nasdaq index added 111 points or 1.0%.
US government bonds rose on Wednesday (yields lower) after the release of the latest US Federal Reserve meeting minutes. Data showed that the number of Americans filing new claims for jobless benefits increased to a three-month high last week and surveys showed that US business activity contracted for a fifth straight month in November. US 10-year Treasury yields fell by around 6 points to near 3.69%. And US 2-year Treasury yields dropped by around 3 points to near 4.48%.
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Major currencies were stronger against the US dollar in European and US trade. The Euro rose from lows near US$1.0296 to highs near US$1.0402 and was near US$1.0395 at the US close. The Aussie dollar lifted from lows near US66.34 cents to highs near US67.38 cents and was near US67.35 cents at the US close. And the Japanese
yen rose from near 141.58 yen per US dollar to near JPY139.19 and was around JPY139.55 at the US close.
Global oil prices tumbled by over 3% on Wednesday as traders assessed a higher-than-expected price cap on Russian crude between US$65 and US$70 a barrel and a surprising build in US gasoline inventories. Stocks rose by 3.1 million barrels last week, according to the Energy Information Administration. Analysts had estimated a build of 383,000 barrels. The Brent crude oil price fell by US$2.95 or 3.3% to US$85.41 a barrel. And the US Nymex crude oil price shed US$3.01 or 3.7% to US$77.94 a barrel.
Originally published by CommSec