China plans to open to tourists in spring 2023. Bank of Japan may adjust its ultra-soft policy

As the stock market closed on Tuesday, the Dow Jones Index (US30) decreased by 0.24%, and the S&P500 Index (US500) lost 0.41%. The NASDAQ Technology Indexм(US100) decreased by 0.89% yesterday.

The JOLTS report indicated yesterday that the number of job openings rose to 10.7 million, missing analysts' expectations. Fed officials began hinting that if Friday's US labor market data indicated strength in the market, the US Fed might not cut the rate of increase until later in the year.

The US Fed is likely to raise rates by 0.75% today. This scenario is already in the price movement, so the biggest interest will be the speech of the head of the US Fed, Jerome Powell. If Mr. Powell hints that the Сentral Bank needs to take a slower rate hike, it could lead to a sharp drop in the dollar Index and a rise in the stock indices. Conversely, hawkish statements that the US Fed will stay on its current course could further strengthen the dollar Index. JP Morgan analysts say the 50bp rate hike combined with a dovish press conference could push the S&P 500 (US500) up 10-12% in 1 day.

Pfizer (PFE) reported third-quarter results that beat Wall Street estimates, despite declining Covid-19 vaccine sales in the quarter. The company's stock was up more than 3%.

AMD (AMD) released a report Tuesday with third-quarter results that disappointed analysts. The income indicator did not justify the forecasts. But despite such a report, the company's stock rose in the evening session.

Notable companies reporting today are Qualcomm (QCOM), Booking (BKNG), MetLife (MET), and Ferrari NV (RACE).

European stock markets were mostly up yesterday. German DAX (DE30) gained 0.64%, French CAC 40 (FR40) added 0.98%, Spanish IBEX 35 (ES35) jumped by 0.53%, British FTSE 100 (UK100) closed on Tuesday with 1.29%.

Risks to the global economic growth outlook continue to worsen in October, and leading indicators are signaling an even sharper decline, especially in the Eurozone. On the positive side, the Eurozone managed to avoid a recession in the third quarter, as private consumption proved more resilient to the impact of rising inflation. But inflationary pressures continue to intensify.

Despite a few concrete signs of easing inflation, Central Banks have already given the first signals that "peak growth" has been reached. The Bank of Norway, the Bank of Canada, and the Reserve Bank of Australia have already signaled a lower rate of tightening going forward, and analysts expect the ECB to also lower the rate of increase to 50 basis points in December.

China, the biggest oil importer, said Tuesday it is reviewing social restrictions because of the virus and may fully open for business and tourists by the spring of 2023. The news boosted oil futures after a two-day decline, and major Asian indices also rose.

According to the Wall Street Journal, Saudi Arabia shared intelligence with the US and warned of an imminent attack from Iran. The US, Saudi Arabia, and several other countries in the region raised the alert level of their units.

Asian markets traded higher yesterday. Japan's Nikkei 225 (JP225) gained 0.33%, Hong Kong's Hang Seng (HK50) ended the day up 5.23%, and Australia's S&P/ASX 200 (AU200) increased by 1.65%.

The Reserve Bank of New Zealand, in its Financial Stability Report, indicated that while the financial system is generally strong, some households and businesses will be stressed in the coming months.

Bank of Japan Governor Haruhiko Kuroda said that the bank might adjust its ultra-soft policy if inflation in Japan continues to rise. Inflation in Japan is now close to an eight-year high and is projected to rise in the coming months.

S&P 500 (F) (US500) 3,856.10 −15.88 (−0.41%)

Dow Jones (US30) 32,653.20 −79.75 (−0.24%)

DAX (DE40) 13,338.74 +85.00 (+0.64%)

FTSE 100 (UK100) 7,186.16 +91.63 (+1.29%)

USD Index 111.51 -0.01 (-0.01%)

• – New Zealand RBNZ Gov Orr Speaks at 00:00 (GMT+2);
• – Canada BOC Macklem Speaks at 00:30 (GMT+2);
• – Japan Monetary Policy Meeting Minutes at 01:50 (GMT+2);
• – Spanish Manufacturing PMI (m/m) at 10:15 (GMT+2);
• – Italian Manufacturing PMI (m/m) at 10:45 (GMT+2);
• – French Manufacturing PMI (m/m) at 10:50 (GMT+2);
• – German Manufacturing PMI (m/m) at 10:55 (GMT+2);
• – German Unemployment Rate (m/m) at 10:55 (GMT+2);
• – Eurozone Manufacturing PMI (m/m) at 11:00 (GMT+2);
• – US ADP Nonfarm Employment Change (m/m) at 14:15 (GMT+2);
• – US Crude Oil Reserves (w/w) at 16:30 (GMT+2);
• – US FOMC Statement at 20:00 (GMT+2);
• – US Fed Interest Rate Decision at 20:00 (GMT+2);
• – US FOMC Press Conference at 20:30 (GMT+2).

by JustMarkets, 2022.11.02

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.