Japanese Yen Strengthens After Powell’s Comment on Smaller Rise
Temasek’s FTX’s $245m loss ’caused reputational damage’ for Singapore, deputy PM says
Singaporean Deputy Prime Minister Lawrence Wong said the $275 million state sovereign wealth fund investment loss in crashed crypto exchange FTX is “disappointing and has caused reputational damage” to the city-state.
But the loss of investment does not mean the governance system is not working, Wong said, adding that an internal review is underway.
“Rather, it’s the nature of investing and risk taking,” he said.
FTX’s loss will not affect the net investment returns of Singapore’s reserves, which are “linked to the overall long-term expected returns of our investment entities and not to individual investments,” it said.
Going forward, Singapore plans to require crypto service providers to implement basic investor protection measures, but “no regulation can eliminate this risk,” he warned.
China’s Caixin manufacturing PMI marks fourth consecutive month of contraction
from China Caixin/Markit Manufacturing Purchasing Managers Index for November it came in at 49.4, higher than expectations of 48.9 in a Reuters poll of economists.
The reading marks a fourth straight month of contraction, after a reading of 49.2 in October and a fall to 48.1 in September, below the 50-point mark that separates growth from contraction.
Separately, the PMI official print from China’s National Bureau of Statistics reported on Wednesday that it reached 48, showing a second straight month of contraction in factory activity.
Oil prices little changed as White House assesses additional oil reserves
The White House is considering building additional oil reserves against the backdrop of the upcoming winter and the uncertainty surrounding the market, sources familiar with the matter told CNBC.
The Biden administration is weighing whether to ask Congress to increase the storage limit, possibly by doubling it, to generate additional reserves that the administration could release if supply drops or prices rise again, the people said.
The United States currently has about 1 million barrels of heating oil in New York and Connecticut.
The White House is bracing for a possible price hike as Europe’s oil embargo and the G-7 price cap on Russian oil loom, potentially disrupting supplies.
Oil prices have changed little in the early hours of Asia. the West Texas Intermediate Futures fractionally dipped to settle at $80.53 a barrel, while the Brent crude futures it lost 0.06% to settle at $86.92 per barrel.
—Kayla Tausche, Lee Ying Shan
CNBC Pro: Forget Amazon. Here’s what top tech investor Paul Meeks is buying
Investor confidence in the technology sector was shaken this year amid a flight to safety, but top technology investor Paul Meeks said he is “more bullish” on the sector now than he has been in recent years. months, although it remains selective within the sector.
He tells CNBC the stocks he prefers.
Professional subscribers can read more here.
South Korea’s revised GDP confirms growth in Q3
South Korea revised gross domestic product for the third quarter it confirmed a growth of 3.1% compared to the same period of the previous year, higher than the expansion of 2.9% observed in the second quarter.
The economy experienced slower quarterly growth of 0.3% in the third quarter, after growing 0.7% in the prior period.
Separately, South Korea reported a trade deficit of $7.01 billion for November, beating expectations of $4.42 billion, marking the third straight month of rising trade deficits driven by sluggish exports.
Exports contracted 14%, below forecasts for an 11% drop, while imports grew more than expected by 2.7%, according to preliminary data from the customs agency.
CNBC Pro: UBS reveals 15 global stocks sensitive to China’s reopening plans
Chinese stocks have surged this week after the country’s health authorities reported a recent rise in vaccination rates, which experts see as crucial for the country’s reopening.
The impact of Beijing’s reversal in dealing with the Covid-19 outbreak is being felt not only in China but also around the world.
The Swiss bank UBS has identified 15 shares in the MSCI Europe Index that will outperform “in an environment where China’s growth picks up and the country reopens its borders.”
CNBC Pro subscribers can read more here.
Powell continues to believe in a path to a soft landing
Federal Reserve Chairman Jerome Powell says he continues to believe in a path to a “soft” landing, even if the path has narrowed over the past year.
“I would like to continue to believe that there is a path to a soft or soft landing,” Powell said at the Brookings Institution.
“Our job is to try to do that, and I think it can still be done,” Powell said. “If you look at history, it’s not a likely outcome, but I would just say that this is a different set of circumstances.”
Indices jump on Powell’s comments
Comments from Fed Chairman Jerome Powell that the central bank will slow future interest rate hikes as soon as December pushed all three major indices higher.
the S&P 500 jumped 0.6% from the red on the news.
the Dow it was almost flat after trading lower for most of the day.
the Nasdaq Composite gained strength up to 1.3% more.
Powell says the Fed may “pace” future rate hikes due to lagged effect of past hikes
Federal Reserve Chairman Jerome Powell told an audience at the Brookings Institution on Wednesday that the central bank can afford to ease its tighter monetary policy at its December meeting (which ends on December 14).
The lagged effect of higher rates already being taken in 2022, plus reducing the size of the Federal Reserve’s balance sheet through quantitative tightening, means that “it makes sense to moderate the pace of our rate hikes as we get closer to to the level of tightening that will be enough to reduce inflation,” Powell said.
“The time to ease the pace of rate hikes could come at the December meeting,” the 69-year-old Fed chairman said.
In response to Powell’s comments, the S&P 500 rose rapidly to around 3,970 versus 3,950 before the address.
—Scott Schnipper, Jeff Cox
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