Fed Slowdown

Most Federal Reserve officials believe the central banks should slow the pace of interest rate hikes, minutes from its latest gathering earlier this month showed. The minutes, released Wednesday, support expectations the Fed will raise rates by 50 basis points in December, ending a run of jumbo 75 basis point increases. Stocks rallied and the dollar fell toward a three-month low on the news.

iPhone Drama

Foxconn has begun offering staff 10,000 yuan, roughly $1,400, to any workers who choose to leave, an unusual decision intended to appease disgruntled new hires who played a central role in violent protests that rocked the world’s largest iPhone factory. Apple’s main global production partner said in an online notice the sum, to be paid out in two installments, will help smooth the journey home for employees. Many of the 200,000-plus workers at Foxconn’s main plant in Zhengzhou hail from elsewhere in the province or country.

Oil Tumble

Oil held a drop as the European Union considered a higher-than-expected price cap on Russian crude and signs of a global slowdown increased. West Texas Intermediate traded near $78 a barrel after losing 4% Wednesday. EU officials discussed setting the ceiling for Russian seaborne exports at $65 to $70 a barrel, far higher than many expected. The desire to punish Moscow for the war in Ukraine while keeping markets supplied has created a headache for the Group of Seven countries behind the cap. Ambassadors are scheduled for more talks Thursday amid disagreements on the details.

Big Short

Bill Ackman is shorting the Hong Kong dollar. The founder of hedge fund Pershing Square is betting against the currency’s peg with the greenback. Pershing owns a “large notional position” in Hong Kong dollar put options — bearish wagers on the currency — he said in a tweet. “The peg no longer makes sense for Hong Kong and it is only a matter of time before it breaks.”

Coming Up…

Equity futures indicated a muted open for European shares despite a rally for US and Asian stocks after Federal Reserve meeting minutes suggested a slowdown in rate hikes. The European Central Bank will publish its own minutes from its October gathering. Sweden’s Riksbank will release its policy rate. Adevinta, Elekta and Remy Cointreau are among the companies releasing earnings. US markets will be closed for the Thanksgiving holiday.

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(Source: Bloomberg, Nov. 24-2022)