MARKET WRAPS
Watch For:
EU unemployment; Germany foreign trade; France industrial production index, flash estimate of job creation; Italy unemployment; UK services PMI, official reserves; trading updates from Solvay, BMW, Vonovia, Societe Generale, Intesa Sanpaolo, Swiss Re, A.P. Moller-Maersk, Wickes Group
Opening Call:
European stock futures rise on hopes that major central banks may be done raising rates for now. In Asia, stock benchmarks tracked Wall Street higher; the dollar steadied; Treasury yields largely fell; while oil futures advanced and gold was little changed.
Equities:
European shares look poised to track Wall Street and Asian equities higher following the Federal Reserve and the Bank of England's decisions to stand pat this week.
The main theme has been risk on as equities have rallied across the board, Commerzbank said. Some market participants have interpreted the Fed's tone as slightly more dovish than expected and a possible end to the tightening cycle, Commerzbank added.
The U.S. jobs report for October due later today will be in focus. Indications that the job market remains hot could complicate the Fed's interest-rate plans and send yields higher again. Fed Chair Powell was careful not to rule out another rate increase at Wednesday's news conference.
Forex:
The U.S. dollar was steady ahead of the U.S. October nonfarm payrolls report due out later today. A weaker jobs reading could put further downward pressure on U.S. yields and weigh on the greenback, CBA said.
Bonds:
The U.S. 10-year Treasury yield's uptrend may have either ended or is close to ending, based on the daily technical chart, said UOB. This is indicated by the sharp pullback in overbought conditions and swiftly deteriorating upward momentum.
Also, the yield's recent pullback breached the rising trendline connecting lows of September and October, and it closed clearly below 21-day exponential moving average on Thursday, UOB added. On the downside, the key support zone is between 4.510% and 4.540%.
Energy:
Oil futures rose slightly in Asia amid a broad pick-up in risk appetite across markets, ANZ said. Geopolitical risks are also supportive, ANZ said, noting a WSJ report that Russia's Wagner Group may send air defense weapons to Iran-backed Hezbollah, which could raise the risk of the conflict spreading across the region, threatening disruption to oil supplies.
"However, so far, the broader impact of the Israel-Hamas war has been limited," ANZ added.
Metals:
Gold futures were flat early Friday, as investors trim bets on further rate hikes by the Fed.
Oanda said the precious metal will need a new bullish catalyst to maintain prices above and beyond the $2,000 level, noting that gold needed the risk of overtightening by the Fed to trigger safe-haven flows.
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Copper rose amid risk-on sentiment. Markets continue to rally after both the U.S. and U.K. central banks held rates unchanged this week, ANZ said.
The possibility of no further monetary tightening should boost sentiment, given that aggressive tightening has been a headwind for base metals during the past 18 months, ANZ added.
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Iron ore prices advanced in Chinese trading, with sentiment boosted by stimulus policies. Beijing's recent CNY1 trillion central government bond and commitment to resolve local debt risks at a key financial conference have lifted market expectations and sentiment, Baocheng Futures said.
However, support from the demand side is weakening as steel mills' profitability has shown little improvement, Baocheng said. Weak profitability could lead to expansion of production cuts among mills and change market fundamentals.
TODAY'S TOP HEADLINES
What to Watch in Friday's Jobs Report: How Long Can Labor Market Keep Booming?
Employers pulled back on hiring in October while handing out smaller annual raises, analysts said, which would be indications the labor market is slowly losing momentum.
It's U.S. vs. China in an Increasingly Divided World Economy
China passed a significant milestone last fall: For the first time since its economic opening more than four decades ago, it traded more with developing countries than the U.S., Europe and Japan combined. It was one of the clearest signs yet that China and the West are going in different directions as tensions increase over trade, technology, security and other thorny issues.
For decades, the U.S. and other Western countries sought to make China both a partner and a customer in a single global economy led by the richest nations. Now trade and investment flows are settling into new patterns built around the two competing power centers.
Ferrari Raises Guidance After Sales Mix, Customizations Lift Profit
Ferrari raised its full-year guidance after profit and revenue grew in the third quarter on a better sales mix and higher demand for vehicle customization.
The Italian sports-car maker said Thursday that after-tax profit reached 332.0 million euros ($350.9 million) compared with EUR228.0 million in the third quarter of last year. Analysts had expected EUR297.0 million, according to estimates provided by FactSet.
War in Ukraine Loosens Russia's Grip on Its Own Backyard
When domestic turmoil engulfed Kazakhstan in January last year, Russian airborne troops quickly swooped in to help restore order. Moscow's sway in much of the former Soviet Union-areas that Russians refer to as "near-abroad"-seemed to be at its peak.
The invasion of Ukraine, launched the following month, bared the stark limits of Russian power in what Moscow considered its own backyard. Spooked by the bloodshed in Ukraine and by the international sanctions imposed on Russia, its neighbors and allies now are busy diversifying their relationships, hedging against Moscow by deepening ties with China and the West.
Russia's Wagner Group Plans to Send Air Defenses to Hezbollah, U.S. Says
Wagner Group, the Russian paramilitary organization, plans to provide an air-defense system to Hezbollah, the Lebanese militia, U.S. officials say, citing intelligence.
The Russian SA-22 system they plan to send uses antiaircraft missiles and air-defense guns to intercept aircraft.
Israel's Economy Takes Hit From War, But Shows Signs of Resilience
The Israeli economy has been buffeted since the Hamas attack on the country, with the currency sliding against the dollar and the country's leading stock-market index, the TA35, down around 10% since Oct. 7.
As the conflict escalates with Israel's invasion of Gaza, the country with a population of around 9.4 million has called up around 360,000 reservists, putting a strain on the labor market, particularly in the nation's flourishing tech sector.
Apple Sales Decline as China Market Weighs on Earnings Report
Apple said sales fell for the fourth consecutive quarter, including a decline in China that came as the company faces a broad economic slowdown in the country and new competition from rival Huawei Technologies.
The September quarter marks the fourth straight period in which Apple reported year-over-year declines in total revenue, the longest such slump in years. Apple sales were $89.5 billion, down less than 1% from the previous year and largely in line with analyst estimates, even as net income of about $23 billion exceeded expectations.
Sam Bankman-Fried Is Convicted of Fraud in FTX Collapse
FTX founder Sam Bankman-Fried was convicted Thursday of stealing billions of dollars from customers of the doomed crypto exchange, in what prosecutors called one of the biggest financial frauds in U.S. history.
A New York federal jury convicted him of all seven counts he faced. The verdict capped the stunning fall of the onetime crypto king, whose shaggy-haired, boy-genius persona helped catapult FTX into a powerhouse trading platform that sponsored sports teams and ran glitzy ads featuring football great Tom Brady, model Gisele Bündchen and comedian Larry David.
The AI Deals Enriching Silicon Valley's Tech Giants
Amazon, Google and Microsoft have spent the past year investing billions of dollars in artificial-intelligence startups-while also charging those fledgling companies a similar amount to use their cloud platforms.
The deals are making the big tech firms both the largest backers and most direct beneficiaries of these startups, reflecting how some of the AI boom's biggest rewards keep going to the most powerful players. The value of the tech giants' stakes could shoot up if the startups take off. And if not, they still will have turned chunks of cash into revenue.
Google, Lendlease Scrap $15 Billion Real-Estate Development in Silicon Valley
SYDNEY-Four years ago, Google and Australia's Lendlease rolled out a vision for a more than $15 billion real-estate investment in the San Francisco Bay Area featuring apartments, shops and new office space.
Now, those plans are on the scrapheap, the latest example of U.S. tech leaders dumping office space at a rapid clip as they reassess commitments to the workplace.
Starbucks Collaborates with Apple on Green Apron Innovation Store in Growth Plan
Starbucks is pairing up with Apple in one part of the company's broader long-term growth strategy.
The coffee chain said Thursday it is collaborating with products of the tech company in its first Green Apron Innovation store to experiment and refine technology to assist global partners.
Amazon Executives Discussed How Its Policies Hurt Sellers, FTC Suit Says
https://urldefense.com/v3/__http://Amazon.com__;!!F0Stn7g!ARRLzhv1g5-rsS67yR76PFGJ0P5jkri18XB7Gn9EHjg8hATICSuQIFfkuwFLAWLmsjvPbbpX6KHZeTfdTNF8weG4zcPdVeRIUreJ2JlflrA$ executives discussed how its pricing policies had a "punitive aspect" on sellers, according to internal documents quoted in newly unredacted portions of the Federal Trade Commission's monopoly lawsuit against the company.
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11-03-23 0115ET
