By Geoffrey Smith
Investing.com — A slew of data awaits, with US housing starts, jobless claims and Philadelphia Fed survey arriving at 2:30 p.m. Several Federal Reserve officials will speak on the outlook for interest rates in the coming hours. Wheat prices fell after Russia and Ukraine renewed their deal on safe passage of Ukrainian exports for another 120 days, as Wednesday’s Pentagon comments hit oil prices, sparking speculation the US could do pressure on Ukraine to agree to peace talks. Shares should open at a loss after another weak update from fallen angel NVIDIA. And the UK has a chance to tell bond markets how sorry it is about its regrettable flirtation with fiscal insanity in September. Here’s what you need to know about the financial markets this Wednesday November 17th.
1. US data and Fed action galore
The US releases weekly data and plus the Philadelphia Federal Reserve’s monthly survey in a market that was forced to reevaluate its recent rally on Wednesday by a stronger-than-expected report for October.
On Wednesday, Federal Reserve Governor Chris Waller added his voice to that of others, suggesting that a cut of just 50 basis points at the next Fed meeting would be acceptable given growing signs that inflation may have peaked. . Nonetheless, other comments by San Francisco Fed Chair Mary Daly, alluding to a “terminal” Fed Funds rate above 5%, underlined that the Fed’s tightening cycle is far from over.
The Fed governors and will speak later, as will the Cleveland Fed chairman.
2. Renewed wheat deal pushes wheat to 2-month low
Global food prices fell to their lowest level in more than two months after Russia and Ukraine agreed to extend the deal that protects food exports from Ukrainian ports for 120 days.
The announcement allayed fears that Russia could withdraw from the deal after it expressed reservations following Ukraine’s attack on the Kerch Strait bridge last month. Doubts about the deal had also deepened after the explosion of a Ukrainian air defense missile in Poland, which briefly threatened to escalate the war in Ukraine.
The deal does not appear to include guarantees for the export of Russian ammonia from the port of Odessa, which Moscow had insisted on. This could keep pressure on global ammonia prices and limit global fertilizer supplies next year, putting long-term upward pressure on crop prices.
3. Bearish opening in equity markets; NVIDIA disappoints again, while Tencent triggers the defeat in China
US stock markets are expected to open lower after the October retail sales report challenged the argument that weakening demand will force the Fed to end rate hikes prematurely.
The mood, particularly in the tech sector, isn’t helped by another round of weak numbers from NVIDIA (NASDAQ:), which showed how the pandemic-era twin bubbles in gaming and cryptocurrency mining have burst. The decline in Chinese tech stocks is also weighing on sentiment, following Wednesday’s announcement by Tencent (HK:) to lose its stake in Meituan (HK:), which was interpreted as a signal that its battles with Beijing regulators aren’t done yet.
As of 2:10 pm, they were down 148 points, or 0.5%, while and were down in parallel. Wednesday sold lost 1.5%, while the fell by 0.1% and 0.8%.
Most of the day’s US results will be released after the bell, with reports from Applied Materials (NASDAQ:), Palo Alto Networks (NASDAQ:), Ross Stores (NASDAQ:) and Gap (NYSE:).
4. UK unveils new tax plans
The British government is to publish its tax and spending plans for next year, desperately trying to undo the damage caused by Liz Truss’s ill-advised bet on tax cuts.
As bond markets have recovered since Ms Truss was replaced as prime minister by Rishi Sunak, Bank of England Governor Andrew Bailey told parliament on Wednesday it would take time for the UK to repair its reputation of economic competence.
Chancellor of the Exchequer Jeremy Hunt is expected to announce significant fiscal policy tightening, split 60/40 between spending cuts and tax increases, to put public debt back on a downward path over the medium term. Among the many pitfalls he will have to negotiate are huge arrears on the National Health Service, reluctant public sector unions and Britain’s rising cost of servicing debt linked to inflation.
5. Oil falls after Chinese stocks report and Milley’s comments
Crude oil prices hit three-week lows amid signs that China is continuing to buy more oil than its economy actually needs right now, and it hopes this week’s events in Ukraine may yet end the woes. hostility.
Mark Milley, the US joint chief of staff, told a press conference that an outright military victory for Ukraine was unlikely in the near term, fueling speculation about behind-the-scenes pressure on Ukrainian President Volodymyr Zelensky to ease conditions established by him peace talks with Russia.
As of 2:10 pm, oil futures were down 1.6% to $84.20 a barrel, while oil futures were down 1.2% to $91.75 a barrel.