EMEA Morning Briefing : Stock Futures Muted; Fed Minutes Awaited

MARKET WRAPS

Watch For:

EU New Passenger Car Registrations in Europe statistics; UK public sector finances; trading updates from CRH, Siemens Energy, Enel

Opening Call:

European stock futures were muted. Asian equities tracked Wall Street higher; the dollar fell; Treasury yields were mixed; oil futures fell and gold rose.

Equities:

Stock futures were slightly higher early Tuesday. Asian equities advanced after Wall Street's gains overnight amid optimism over artificial intelligence. Nvidia's earnings later today will also be closely watched.

Ryan Detrick, chief market strategist at Carson Group, said "there's still incredible potential" in artificial intelligence. "Companies like Microsoft and Nvidia, they're clearly capitalizing on that," he said.

Sentiment is also boosted by expectations that the Federal Reserve is done raising rates. The minutes of the Fed's last meeting, to be released later today, will be in focus.

"With a cooling economy easing concerns about another rate hike, expectations are now, right or wrong, focused on when the Fed may pivot to cuts," said Chris Larkin, managing director for trading and investing at E-Trade at Morgan Stanley.

Forex:

The U.S. dollar weakened in Asian trading. There could be an element of pre-U.S. holiday position adjustment at play, Westpac said. The USD Index appears to be settling into a steadier day-to-day bear trend, Westpac noted.

Bonds:

Treasury yields were mixed early Tuesday, and traded near recent lows on Monday after an auction of 20-year government bonds drew stronger-than-expected demand, pushing Treasury prices higher.

Meanwhile, investors await minutes of the Fed's November meeting in an abridged trading week ahead of the Thanksgiving holiday.

Energy:

Oil futures edged lower early Tuesday in a likely technical correction after futures closed higher for a second straight session on Monday.

However, growing expectations that OPEC+ may take action at the group's upcoming meeting, such as Saudi Arabia potentially rolling over additional voluntary production cuts into 2024, are providing support, ING said. Speculators won't want to go into this weekend with sizable short positions, ING added.

Metals:

Gold ticked higher in Asia amid continued bets that the Fed's rate-increase cycle may be over. Gold and silver should remain supported on dips on the peak interest-rates narrative, said Fawad Razaqzada, market analyst at City Index and https://urldefense.com/v3/__http://forex.com__;!!F0Stn7g!HjvwWiLHVt7GNe44YOuYLgDwqKFy7rC5xciwVdk7IEqVo2HTGKIyvJ-UWLkQo-oXIMgDTjrD56wkUfmNr3saXI4dMK8WHdGy7317C-SDpTg$ .

Precious metals investors are hoping the next Fed rate move will be a cut, possibly as early as 2Q as signs emerge of inflation being on a path of slowing toward the Fed's target in the long term, he added.

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Copper prices rose amid renewed concerns about tight copper mine supply. Workers at Las Bambas copper mine are on the second day of strike while the union plans a new indefinite strike, ANZ said. Canadian mining and metals company First Quantum plans to shut down its Panama copper mine later this week due to a port blockade, ANZ noted.

Meanwhile, increasing optimism around additional Chinese stimulus measures and the Fed ending its rate-hike cycle lifts commodity prices broadly, ANZ added.

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Iron ore advanced as sentiment is boosted by signs of demand from China as well as potential supply disruptions.

Data from the China Iron & Steel Association suggest that the country's imports of the steelmaking material are expected to rise to a fresh record high, Huatai Futures said.

TODAY'S TOP HEADLINES

AI Mania Powered Stocks This Year. Can Nvidia Spark More Gains?

There is a lot riding on the earnings report this week from Nvidia, both for the company's ebullient investors and the entire stock market.

Nvidia has been the big winner of the bet that artificial intelligence is the next big thing in tech, the so-called AI trade that surged in popularity after OpenAI's release of its ChatGPT app. The chip maker's shares have more than tripled this year, contributing to a sizable portion of the S&P 500's 18% rise.

DOJ Settles With Two U.K. Reinsurance Brokers Over Ecuador Bribes

The Justice Department has settled with two U.K.-based reinsurance brokers that admitted to participating in a scheme to bribe Ecuadorean government officials.

Tysers Insurance Brokers and H.W. Wood have agreed to enter into three-year deferred prosecution agreements filed in the Southern District of Florida.

Israeli Military, Border Residents Press Netanyahu to Eliminate Hezbollah Threat

LEHAVOT HABASHAN, Israel-In the days after the Oct. 7 Hamas attacks in southern Israel, Orna Rayn searched frantically for someone to build a wooden barricade to secure the door of a safe room in her house about 6 miles from the Lebanon border.

Rayn's sister, Einat Rothem-Nechushtan, moved into the safe room on Oct. 10, even before the Israeli government ordered the evacuation of her own small farming community in northern Israel because of fears of all-out war with Hezbollah, the Iran-backed army in Lebanon.

OpenAI's Path Ahead Is Unclear as Employees Threaten to Quit Unless Board Resigns

The future of OpenAI was in jeopardy Monday, as the vast majority of employees threatened to quit if the board that fired the company's CEO, Sam Altman, didn't resign itself and restore him to power.

Microsoft CEO Satya Nadella said late Sunday that the company was hiring Altman and Greg Brockman, OpenAI's president who resigned in protest after Altman was ousted, and was opening its doors to more joining from the company behind viral chatbot ChatGPT.

Chinese Property Stocks Soar on Hopes of More Supportive Measures

Chinese property stocks rose sharply Tuesday on hopes for more supportive policy measures, after a media report said Chinese authorities are drafting a list of developers that are eligible for obtaining funding.

The Hang Seng Mainland Properties Index jumped 5.4%. Sunac China surged 20% to 2.80 Hong Kong dollars (36 U.S. cents), Longfor Group Holdings gained 7.2% and China Vanke was up 5.3%.

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Expected Major Events for Tuesday

06:00/FIN: Oct Labour force survey, incl unemployment

07:00/EU: Oct New Passenger Car Registrations in Europe statistics (EU27 + EFTA3)

07:00/SWI: Oct Trade Balance

07:00/SWE: 3Q Industrial capacity utilization

07:00/UK: Oct Public sector finances

08:00/SPN: Sep Industrial Orders & Turnover

09:00/ICE: Oct Harmonized CPI

09:00/POL: Oct Average gross wages

09:00/POL: Oct PPI

09:00/POL: Oct Industrial Production Index

10:00/MLT: Oct Registered Unemployed

11:00/FRA: 3Q OECD Quarterly National Accounts: GDP growth

13:00/HUN: Nov Hungarian interest rate decision

23:00/NED: Oct House Price Index

All times in GMT. Powered by Onclusive and Dow Jones.

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This article is a text version of a Wall Street Journal newsletter published earlier today.

(END) Dow Jones Newswires

11-21-23 0018ET