Daily summary: ECB echoes subtle change in central bank tone

• European indices finished today's session slightly higher as gains in oil and gas stocks more than offset declines across mining and technology companies. 

• ECB raised the key rates by 75 bps as expected, and pledged to continue raising borrowing costs to battle inflation but markets found the ECB tone less hawkish and slightly reduced the future rate hike bets. Fresh report revealed today's move wasn't unanimous and that three members only wanted to hike by 50 bps. 

• ECB Doves said in the evening that guidance change paves the ground for ending increases in December in case of improved inflation outlook or possibly in March

•  Credit Suisse shares fell over 15% after the lender posted a quarterly loss of 4.034 billion Swiss francs and plans massive lay-offs. On the flip side, British oil major Shell shares jumped more than 5% after reporting a third-quarter profit.

• US indices are swinging between gains and losses as investors digested upbeat GDP figures, another slew of lackluster quarterly earnings and rising geopolitical tensions.

• The US economy grew an annualized 2.6% on quarter in Q3 2022, beating forecasts of a 2.4% rise and rebounding from a contraction in the first half of the year. The biggest positive contribution came from net trade as Europe becomes more dependent on US energy exports.

• Caterpillar stock surged over 8%,  Comcast and McDonald added 6% and 3%, respectively, following earnings reports that surpassed estimates. On the other hand, the Nasdaq fell more than 1%, and S&P 500 remained subdued on disappointing earnings from big tech.  Meta sank plunged 25% on weak quarterly results and guidance. 

• China says it is willing to deepen relationships with Russia on all levels and any attempt to block China and Russia moving forward will never succeed. Putin said that sooner or later, the West will have to start talks about our common future and as long as nuclear weapons exist, there is a risk of their use. Later on the Pentagon announced it won’t dismiss the use of nuclear weapons against non-nuclear threats. Citing burgeoning risks from Russia and China, the Pentagon’s new national defense strategy rejects limits on using nuclear weapons long championed by arms control advocates and, in the past and by Biden.

• WTI crude rose 1.3% underpinned by data showing record US crude exports. The US exported a record amount of crude and fuel last week, with total petroleum shipments reaching 11.4 million barrels a day even as fuel inventories hit seasonal lows in domestic markets, adding to concerns about tight supply. Meanwhile, Bloomberg reported that the US and EU are likely to settle for a more loosely policed cap at a higher price than previously planned, with just G7 nations and Australia committed to abide by it.

• Precious metals pulled back slightly despite lower 10-year Treasury yields which reached 3.95% level. Gold fell below $1660 and silver is testing $19.50 level.

• The dollar index hovers above 110.00, near its lowest level in over a month. The EURUSD pair fell over 1%  below parity level as investors scaled back bets on the amount of future tightening by the ECB after dovish comments from president Lagarde. Currently JPY and NZD are the best performing major currencies while GBP and CHF lag the most.

• Mixed moods prevail also on the cryptocurrency market. Most projects erased a large chunk of early gains after the US open. Nevertheless Bitcoin trades above $20,500 level, while Ethereum is testing $1550 level. 

Despite mixed sentiment on global markets US2000 is performing relatively well during today's session. Index is again testing key resistance around 1840 pts, which is marked with previous price reactions and 23.6% Fibonacci retracement of the downward wave launched in November 2021. Source: xStation5