Manufacturing PMI data for Eurozone, Germany, France, UK, Italy;
EuroCOIN indicator of euro area economic activity; update from
European stock futures point to losses at the start of the week.
Major Asian stock benchmarks were mixed in holiday-thinned trading;
Treasury yields fell; the dollar weakened slightly; while oil and
Shares in Europe look set to decline at the open on Monday as
further turbulence is likely.
U.S. stocks fell Friday, closing out a losing week, month and
quarter as investors wrestled with more signs of persistently high
With the Fed signaling it is committed to bring inflation under
control, investors have grown fearful that its campaign of rate
increases will meaningfully slow the economy.
"In the trade-off between growth and inflation, the Fed is going
to choose inflation," said Desmond Lawrence, senior investment
strategist at State Street Global Advisors. "That's what's really
giving you the choppiness that we've had in the past week in
Read: Stocks and bonds are 'discounting for a disaster' after
the worst stretch for investors in 20 years
The dollar pulled back slightly, though USD is likely to be
Financial-market turmoil has yet to abate even after the BOE
stepped in with an emergency bond-purchase program, which may put
downward pressure on major currencies such as GBP, MUFG Bank
Read: A rampaging U.S. dollar just booked its strongest quarter
in at least 7 years as investors search for safety
Treasury yields declined early Monday in Asia, after finishing
the New York session on Friday with their biggest multiquarter rise
in at least a quarter-century, as investors positioned for
aggressively higher interest rates this year.
In comments made at a conference in New York on Friday, Fed Vice
Chair Lael Brainard said policy makers won't pull back from rate
hikes prematurely and that it will take time for high interest
rates to bring inflation down.
Data released Friday underscored her point. While the personal
consumption expenditure gauge of U.S. inflation rose a mild 0.3% in
August, another measure that omits volatile food and energy costs
jumped 0.6% last month - above Wall Street's 0.5% forecast for core
PCE - in a more worrisome sign. The rate of inflation over the past
year slowed to 6.2% from 6.4% in the prior month. However, the core
rate of inflation in the past 12 months climbed to 4.9%.
Read: Battered Investors Now Find Thrills in T-Bills
Oil futures climbed in Asia on prospects that OPEC+ may cut
The group is poised to consider on Wednesday a cut of more than
1 million barrels a day to help support declining oil prices,
according to delegates in the group.
Other options being considered include a smaller reduction of
500,000 barrels a day or as much as 1.5 million barrels a day, the
Gold prices edged higher early Monday amid prospects for lower
Treasury yields and an improving China outlook.
Things are beginning to look better for the precious metal, said
Oanda's Edward Moya.
Wall Street seems confident that the Fed's tightening might be
close to a peak, while China has taken moves to support the housing
market and Beijing might be closer to making a gradual adjustment
to its zero-Covid policy, Moya added.
Copper futures declined, pulling back from last week's
However, ANZ said the metal may be getting some support after an
earlier selloff pushed down prices, while rising supply concerns
could keep buying interest high after the London Metal Exchange
said it was looking at blocking Russian metal from being delivered
to its network of warehouses.
"This could have significant ramifications" as Russia is a major
copper producer, ANZ noted.
TODAY'S TOP HEADLINES
OPEC+ to Weigh Production Cut to Bolster Oil Prices
OPEC+ is set to consider Wednesday its most drastic reduction of
production since the pandemic in order to help prop up falling oil
prices, a move that could put pressure on global economic
The Organization of the Petroleum Exporting Countries and
Moscow-led allies, collectively known as OPEC+, is considering a
cut of more than 1 million barrels a day, delegates in the group
U.K.'s Central Banker Faces Inflation, a Financial Crisis and
His Own Government
LONDON-In late August, Bank of England Gov. Andrew Bailey was at
a symposium in Jackson Hole, Wyo., when a New York University
economist flagged a problem. In a world where central banks are
quickly raising interest rates to calm inflation, they might face
an unexpected crunch in financial markets and need to flood them
with liquidity to prevent a market meltdown.
Mr. Bailey, a bookish, soft-spoken Brit, stood up in the hall
and said such an about-face would be a tough sell to investors and
the public since it would undermine the fight against inflation. It
"is a very difficult message to get across to the outside world,"
Cargo Shipowners Cancel Sailings as Global Trade Flips From
Backlogs to Empty Containers
Ocean carriers are canceling dozens of sailings on the world's
busiest routes during what is normally their peak season, the
latest sign of the economic whiplash hitting companies as inflation
weighs on global trade and consumer spending.
The October cancellations are a sharp reversal from just a few
months ago, when scarce shipping space pushed freight rates higher
and carriers' profits to record levels. Last October, companies
like Walmart Inc. and Home Depot Inc. were chartering their own
ships to get around bottlenecks at ports to meet a surge in demand
Central Banks' Higher Rates, Bond Sales Clash With Government
FRANKFURT-Central banks and governments are on a collision
For 15 years, central bankers around the world worked hand in
glove with elected leaders to bolster economic growth and
Inflation Keeps the U.S. From Stepping In to Slow Dollar's Rapid
WASHINGTON-U.S. policy makers aren't likely to take action to
slow the dollar's rapid rise despite rising risks of global
financial turmoil, analysts say, largely because a strong greenback
helps fight domestic inflation.
The U.S. dollar has soared in value as the Federal Reserve
raises interest rates to fight the highest U.S. inflation in
decades and investors move money into dollar-denominated assets.
The WSJ Dollar Index, which measures the dollar against a basket of
other currencies, is up roughly 16% so far this year.
U.K. Prime Minister Liz Truss Admits Mistake in Communicating
LONDON-U.K. Prime Minister Liz Truss said that her government
could have done a better job preparing financial markets for a
surprise tax-cut plan funded by increased debt, but otherwise
defended the package of economic measures.
"We should have laid the ground better," Ms. Truss said in an
interview with the British Broadcasting Corp. on Sunday. It was her
first acknowledgement that her signature policy since taking office
last month had fallen flat among investors, voters and some members
of her own party.
Probe Into Nord Stream Pipeline Damage Faces Hurdles at Sea,
When Bjorn Lund's team at the Swedish National Seismic Network
first recorded tremors in the Baltic Sea, it didn't initially
notice anything unusual.
The area, off the coasts of Denmark and Sweden, is used for
naval exercises by both countries. The institute, part of Uppsala
University, regularly records the impact of explosive blasts
Credit Suisse Seeks to Calm Market Jitters
Credit Suisse Group AG tried to assuage fears about its health
in a memo to employees and in a round of phone calls to investors
and clients over the weekend, according to people familiar with the
Credit Suisse shares are down 21% this month and spreads on its
credit-default swaps, a type of insurance against default, rose to
their highest level of the year on Friday. The deteriorated market
condition indicates that Credit Suisse could struggle to raise new
shares to pay for a planned restructuring and that its funding
costs could rise sharply.
Rio Tinto Calls for ERA Chairman to Resign
SYDNEY-Rio Tinto PLC said it is seeking the resignation of the
chairman of Energy Resources of Australia Ltd., citing differences
over the approach to rehabilitating the tapped-out Ranger uranium
mine in northern Australia.
Rio Tinto said ERA Chairman Peter Mansell should step down as
the small mining company had failed to put forward an acceptable
funding solution to meet its obligations to rehabilitate the Ranger
site. Rio Tinto owns around 86% of ERA's stock.
Russia's Gazprom Suspends Gas Flow to Italy
Russian gas giant Gazprom PJSC said it suspended its natural-gas
deliveries to Italy over the weekend after it didn't receive
authorization for the pipeline flows via Austria.
It wasn't immediately clear whether the interruption was a
temporary bureaucratic glitch, or whether Italy has now joined the
growing list of European Union countries that have been cut off
from Russian gas.
ConEd Agrees to Sell Clean Energy Business for $6.8 Billion to
Consolidated Edison Inc. has agreed to sell its renewable energy
business to German energy company RWE AG for $6.8 billion, the
companies said Saturday.
The deal nearly doubles RWE's renewable energy portfolio in the
U.S. and will make it the second-largest solar operator in the
country, the company said in a statement. ConEd's portfolio
includes more than 10 gigawatts of renewable projects in operation
or under development.
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Expected Major Events for Monday
00:01/IRL: Sep Ireland Manufacturing PMI
06:30/SWI: Sep CPI
07:00/TUR: Sep Turkey Manufacturing PMI
07:00/NED: Sep Netherlands Manufacturing PMI
07:00/POL: Sep Poland Manufacturing PMI
07:00/TUR: Sep PPI
07:00/TUR: Sep CPI
07:15/SPN: Sep Spain Manufacturing PMI
07:30/EU: Sep EuroCOIN indicator of euro area economic
07:30/CZE: Sep Czech Republic Manufacturing PMI
07:30/SWI: Sep procure.ch Purchasing Managers' Index
07:45/ITA: Sep Italy Manufacturing PMI
07:50/FRA: Sep France Manufacturing PMI
07:55/GER: Sep Germany Manufacturing PMI
08:00/GRE: Sep Greece Manufacturing PMI
08:00/EU: Sep Eurozone Manufacturing PMI
08:30/UK: Sep S&P Global / CIPS UK Manufacturing PMI
09:00/DEN: Sep Danish PMI
09:00/CYP: Jul Retail trade
10:00/POR: Aug Industrial production index
16:59/AUT: Sep Unemployment figures
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newsletter published earlier today.
(END) Dow Jones Newswires
October 03, 2022 00:15 ET (04:15 GMT)
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