Moving markets today: Asia stocks dip, oil slides ahead of OPEC+ meeting, attention on U.S. inflation
Asian shares opened the week cautiously amid anticipation of crucial inflation data from the U.S. and Europe. China reported a decline in industrial profits. Oil prices slipped below $80. Investors were focused on the upcoming OPEC+ meeting and awaited key events later in the week, including U.S. and EU inflation data and a speech by Powell.
China’s Industrial Profits Drop 7.8% in January-October
China’s industrial profits fell 7.8% in the first 10 months of 2023, following a 9% decline in the first nine months, according to official data on Monday. The post-pandemic economic recovery in China has been uneven, starting strong in the first quarter, slowing in the second, and gaining momentum in the third.
China’s central banks said it would aim to promote support for private companies by financial institutions but provided limited details.
Brent Slips Below $80 Ahead of OPEC+ Meeting
Oil prices decline, with Brent fell below $80 per barrel. Investors awaited the OPEC+ meeting later in the week for a potential agreement on supply cuts extending into 2024. Brent crude declined 1.0% to $79.78 a barrel, while U.S. West Texas Intermediate fell 1.1% to $74.71 a barrel. Both contracts recorded a slight gain last week, driven by expectations of extended supply cuts from Saudi Arabia and Russia into early 2024, with further reductions discussed within OPEC+.
UK Advertised Salaries Drop, Job Ads Rise
UK advertised salaries hit a six-month low in October, signalling reduced inflation pressure. Despite this, the labour market showed signs of recovery with the first increase in job vacancies since June. Adzuna reported the average annual advertised salary at £36,946 ($46,038.41) last month, down 0.4% from September and 1.9% since April. Andrew Hunter, Adzuna’s co-founder, noted that lower advertised salaries, while seemingly unfavourable for job seekers, indicate a retreat of inflationary threats.
Lawmakers, including ex-BoE Governor Mervyn King, advised the Bank of England to prioritize monitoring changes in the money supply and advocated for a more diverse set of perspectives among interest rate-setters. The House of Lords’ Economic Affairs Committee also warned that the central bank’s extensive government mandate was stretching it too thin.
What’s coming up
ECB President Christine Lagarde will respond to inquiries during the quarterly monetary dialogue with the European Parliament Committee on Economic and Monetary Affairs. The Restaurant Group conducts a special general meeting, allowing shareholders to vote on Apollo Global Management’s proposed £506mn acquisition. Additionally, attention will be on U.S. monthly new home sales figures.
Asian Stocks Lower, Eyes on U.S. and EU Inflation, Powell Event
Japan’s Nikkei fell 0.20% after a 9% surge in November, while MSCI’s Asia-Pacific index, excluding Japan, remained flat but increased by 6.7% for the month. China’s CSI300 dropped 0.84%, and Hong Kong’s Hang Seng tumbled 0.70%. Yields on 10-year Treasuries fell 37 basis points to 4.49% this month, affecting the dollar, which lost 3% against major counterparts. The decline in yields boosted gold, currently at $2,000 per ounce, near its October peak of $2,009.29.
Investors are anticipating a pivotal week with key events ahead. Australia’s CPI release on Nov 29 could impact policymakers; decisions on additional tightening if inflation surprises. China’s National Bureau of Statistics will unveil the PMI on Nov 30. Eurozone’s flash inflation rate for Nov is scheduled for the same day. In the U.S., Q3 GDP figures on November 29 and the core PCE price index on Nov 30 will provide crucial economic insights. India’s GDP for July-Sept will be watched on Nov 30.
