October 26, 2022
United States:
US Dollar Drops to Three-Week Low as Traders Weigh a Fed Pivot
A gauge of the dollar’s strength fell to a three-week low as traders bet the Federal Reserve will temper the pace of its rate hikes amid signs the world’s biggest economy is starting to slow.
The Bloomberg Dollar Spot Index fell as much as 0.9%, sliding along with benchmark Treasury yields for a second day. While a 75-basis-point hike next week is fully priced, traders only see a 50% chance of an increase of that size in December, down from 80% last week.
Europe:
Europe Is Running Out of Time to Act on Gas Before Winter
European ministers pulled off what one diplomat called a miracle in July when they took just six days to agree to slash gas demand. Ever since, the bloc’s timelines have been slipping, and it now looks unlikely key new measures will be in place for winter.
Ministers set another new deadline when they met on Tuesday, and now aim to clinch a deal on the latest batch of proposals to tame energy prices on Nov. 24 — well into the heating season. But even if they manage it, key measures like a new market benchmark won’t kick in until the spring. Plans for price caps remain mired in technical details and political wrangling.
Asia:
China Stock Rally Fizzles as Covid Woes Return to Sour Sentiment
Just as Chinese stocks were showing signs of a revival after Monday’s historic rout, traders were reminded of the fragility of a market that’s been bogged down by President Xi Jinping’s Covid-Zero policy.
As reports of a lockdown in one of Wuhan city’s central districts filtered through trading rooms, equity gauges in China and Hong Kong pared more than half of their advance. An index of Casino shares also erased most of its gains as Macau reported one Covid case.
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