Morning wrap (01.12.2022)

• Wall Street indices rallied yesterday as Powell paved a way for a smaller 50 basis point rate hike in December. S&P 500 gained 3.09%, Dow Jones moved 2.18% higher and Nasdaq surged 4.41%. Russell 2000 jumped 2.72%

• Fed Chair Powell said that he does not want to over-tighten policy and moderating pace of rate hikes would make sense. However, he warned that any rate cuts are off the table in the near future

• Indices from Asia-Pacific followed into footsteps of their US peers and also gained, although scale of moves was much smaller than on Wall Street

• European index futures point to a higher opening of the cash session today with DAX futures trading around 200 points above yesterday's cash close

• US Treasury Secretary Yellen said that soft landing for the US economy remains possible

• Chinese Vice Premier Chunlan said that coronavirus is becoming less severe and Chinese experience in fighting it may allow the country to enter a new stage of the pandemic. Those remarks were taken as a potential prelude to easing of restrictions

• CNBC reports that White House considers release of emergency heating and crude oil reserves

• Chinese Caixin manufacturing PMI moved from 49.2 to 49.4 in November (exp. 48.9)

• South Korean exports plunged 14% YoY in November (exp. -11% YoY) while imports were 2.7% YoY higher (exp. 0.2% YoY). Semiconductor exports slumped 29.8% YoY

• Cryptocurrencies jumped yesterday in the evening amid post-Powell increase in risk appetite. However, major coins are pulling back slightly today with Bitcoin dropping 0.2% and Ethereum trading 1% lower

• Oil is trading slightly lower while precious metals benefit from USD weakening

• JPY and NZD are the best performing major currencies while USD and CAD are top laggards

Nasdaq-100 (US100) rallied yesterday on dovish Powell and managed to break above the downward trendline. Source: xStation5