[Mercato USA]Sales to high-tech stocks fall, yields rise – dollar high at 148 yen – Bloomberg

On the US financial market on the 31st, stocks fell and government bond yields increased. Investors look to the Federal Open Market Committee (FOMC) meeting on November 1 and 2 for clues that the Fed will ease the pace of rate hikes as early as December. The dollar / yen exchange rate is in the upper range of 148 yen. The dollar expanded its gains in the US hour.

Large-cap technology stocks were sold, pushing the S&P 500 index lower. The S&P 500 fell 0.8% over the weekend to 3871.98. The Dow Jones Industrial Average fell $ 128.85, or 0.4%, to $ 32,732.95. The Nasdaq Composite Index fell 1%.

“There have been a lot of scary things this week, with FOMC meetings, press conferences and the US employment report,” Kingsview Investment Management portfolio manager Paul Nolte said in a statement. “What the market is expecting is that the Fed may start signaling that a slowdown is about to begin in a very aggressive rate hike cycle,” he said.

The US Treasury has fallen. Towards the end of the month, the stock recovered from intraday lows thanks to portfolio adjustments at the end of the month. At 4:22 pm New York time, the 10-year yield increased four basis points to 4.05%. Yields on two-year bonds rose to 4.5% level on the day.

The swap market continues to price in another 0.75 percentage point rate hike for the November 1 and 2 FOMC meeting. The rate hikes at the meetings on 13 and 14 December, on the other hand, are split between 0.75 and 0.5 points.

On the foreign exchange market, the dollar rose against most of the major currencies. Traders are expecting another big rate hike in the US. Among the major currencies, the pound fell particularly sharply against the dollar.

“So far the market has completely digested the 180-degree turn in British fiscal policy,” said Citigroup’s Basileios Gionakis. Think about it, “the report states. He said he saw no material to raise the pound.

The Bloomberg Dollar Spot Index, which tracks the movements of the dollar against the 10 major currencies, was up 0.7%. At 4:22 pm New York time, the dollar was up 0.8% against the yen to ¥ 148.71. The euro fell 0.8% against the dollar to $ 0.9882 per euro.

Stephen Englander, global head of G10 foreign exchange research at Standard Chartered, said short-term money market yields would decline if the Fed indicated a slowdown in the pace of rate hikes. “While the dollar is likely to fall in line with Treasury yields, the currencies that will lead the pack should the dollar fall are among the high-yielding emerging market currencies and the low-yielding G10 currencies that have been heavily sold. Could come and go, “he wrote in the report.

New York crude oil futures continue to fall. However, it rose for the first time in five months on the back of prospects for an increase in supply and demand. OPEC Plus, which consists of the Organization of Petroleum Exporting Countries (OPEC) and non-member oil producing countries, will enter the largest production cut-off system since the new coronavirus pandemic (global pandemic) from November 1. The European Union plans to impose sanctions on Russia in December, clouding oil supply prospects.

on the other handFrom ChinaUncertain demand for oil is a headwind for oil prices. Government indices measuring activity in China’s manufacturing and non-manufacturing sectors both contracted in October. Vitol Group, the largest independent oil trader in the world, said there were signs of the destruction of oil demand.

“This year’s skyrocketing energy prices” are still causing pain and hardship in many countries, “Vittle Group CEO Russell Hardy told Bloomberg Television.” As a result, disruption in demand is likely. continue for several months, “he said.

December West Texas Intermediate (WTI) futures on the New York Mercantile Exchange (NYMEX) closed at $ 86.53 a barrel, down $ 1.37 (1.6%) from the previous trading day. December delivery of the London ICE North Sea Brent dropped 94 cents to $ 94.83. This is the last trading day for the same month as the contract.

The New York gold market continues to decline. On a monthly basis, it was the seventh consecutive month of decline, marking the longest period of decline since at least the late 1960s. The FOMC is expected to raise interest rates again this week.

Dollar and Treasury yields, which had fallen last week, rose today, prompting the selling of gold. Market attention is focused on the FOMC. Aggressive interest rate hikes have pushed gold down more than 20% from its March highs.

“Despite the shifts in gold’s sensitivity to long-term drivers, the outlook remains dependent on the direction of the dollar and FOMC stock,” UBS Group analysts led by Wayne Gordon wrote in a statement. “There are downside risks to gold until the end of the year,” he said.