Global equities mixed ahead of Fed rate hike decision

Bangkok – Global equities are mixed ahead of the Federal Reserve’s final rate hike decision for the year.

London, Paris and Frankfurt fell, but Asia’s share rose. U.S. futures plunged, and so did crude oil prices.

a 7.1% US Consumer Price Index reading Hopes are rising that pressure on the economy may ease in November. Widely anticipated Fed This is smaller than the previous four three-quarter point increases.

Interest rate decisions by the Bank of England and the European Central Bank are scheduled for Thursday.

Germany’s DAX fell 0.6% to 14,407.75, while Paris’ CAC 40 also fell 0.6% to 6,704.70. The UK FTSE 100 rose 0.4% to 7,471.04.

Futures on the Dow and the S&P 500 are largely unchanged.

The Bank of Japan’s latest quarterly Tankan survey showed that the business environment for Japan’s major manufacturers is deteriorating. This reflects rising costs and weakening demand for industrial materials and energy as the Fed and other central banks hike interest rates to curb inflation.

The headline index for major manufacturers was 7, down from 8 in the previous quarter and down for the fourth straight quarter. The Tankan measures business sentiment by subtracting the number of companies that said the economy was good from the number of companies that said the economy was bad.

The criteria for non-manufacturing industries such as services rose from 14 to 19 as Japan lifted pandemic precautions and resumed accepting foreign tourists.

“Today’s Tankan survey suggests that the service sector is getting stronger, while the outlook for the manufacturing sector continues to deteriorate,” said Darren Tay of Capital Economics in a commentary. Stated.

Tokyo’s Nikkei 225 rose 0.7% to 28,156.21, while Hong Kong’s Hang Seng rose 0.4% to 19,673.45. South Korea’s Kospi rose 1.1% to 2,399.25.

The Shanghai Composite Index was little changed at 3,176.53.

In Australia, the S&P/ASX 200 rose 0.7% to 7,251.30. India’s Sensex was up 0.7% while Bangkok’s SET was up 0.4%.

The S&P 500 rose 0.7% on Tuesday while the Nasdaq Composite rose 1%. The Dow Jones Industrial Average rose 0.3%. The Russell 2000 Index rose 0.8%.

Stocks capped gains early as analysts warned investors don’t go crazy Economists at Mizuho Bank said in a note that detailed inflation data were “less encouraging internally than on the surface” given expectations of Fed easing. , skewed inflation risk.

“Precisely, the headlines underestimate the potential inflation risk associated with the Fed.

Tuesday’s report offered hope that the worst of inflation has really passed over the summer, despite prices being painfully high.

A 0.50 percentage point Fed rate hike is usually a big deal because it’s twice the normal move. But with inflation emerging from its worst level in generations, it would take him a step back from his four rate hikes of 0.75%, which the Fed has approved since the summer.

Some of Wall Street’s wildest moves on Tuesday were in the bond market, where yields plummeted shortly after the release of the inflation report.

Yields on 10-year government bonds, which help set rates on mortgages and other important loans, fell to 3.49% from 3.62% at the end of Monday. Two-year yields, which more accurately reflect the Federal Reserve’s expectations, fell to 4.22% from 4.39%.

Even if inflation eventually subsides, the global economy is still threatened by the already pushed interest rate hikes. The housing industry, which depends on low interest rates, is particularly weak, and there is widespread concern about the firmness of corporate earnings.

Elsewhere, US benchmark crude fell 2 cents to $75.37 a barrel in electronic trading on the New York Mercantile Exchange. It jumped $2.22 on Tuesday to $75.39 a barrel.

Brent crude, the price benchmark for international trading, dropped 1 cent to $80.67 a barrel.

The dollar fell from 135.59 yen to 135.14 yen. The euro rose from $1.0633 to $1.0664.