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Stock Futures Trade Higher; RBNZ Hikes Rate

Stock Futures Trade Higher; RBNZ Hikes Rate

Stock Market Today 

Following a rally on Wall Street, equity markets in Asia saw gains, led by increases in Hong Kong-listed technology companies on the back of rumours that China’s regulatory war on the industry may be approaching an end.

After the S&P 500 reached its highest level since the middle of September and closed at that level, an index of Asian shares went higher, with Australian and South Korean stocks contributing to the updraft. The good profits reported by Best Buy Company and Abercrombie & Fitch Company, as well as the statements made by Federal Reserve officials that showed a readiness to pause rate rises, contributed to the improvement in sentiment.

As investors mulled over the ramifications of a report that Ant Group Co. faced a fine of more than $1 billion from China’s central bank, Hong Kong technology shares vacillated briefly before regaining their footing and continuing their upward trend. Speculation was sparked because of the announcement that this might indicate a potential end point of the government’s clampdown on technology. It may make it possible for Alibaba Group Holding Ltd. to revive its attempts to float Ant shares.

On Tuesday, a surge in the price of Treasuries drove the yield on the benchmark 10-year note up to 3.76%. Because Japan will be celebrating a holiday on Wednesday, there will be no trading of cash Treasuries elsewhere in Asia.

The statistics on manufacturing in the United States came in lower than expected, which confirmed the idea that inflation had peaked. Mary Daly, the president of the Federal Reserve Bank of San Francisco, has stated that officials must be mindful of the lags in disseminating policy changes. Loretta Mester, the president of the Federal Reserve Bank of Cleveland, has said that she is open to moderating the size of rate hikes.

The Fed leadership wants to get off the 75-basis-point interest rate hike, even if it may be challenging. Traders believe the Federal Reserve will likely introduce a hawkish slowdown stance in its monetary policy. As for the market sentiment, it is the slowdown in the interest rate that counts. 

Forex

Adrian Orr, the governor of the Reserve Bank of New Zealand (RBNZ), said that the bank’s primary objective is to raise the official cash rate to a level where inflation can be controlled.

The statements made by Orr came after the central bank increased interest rates by 75 basis points, which was their most significant increase to date.

During a press conference, Orr said that our core inflation rate is too high, and he also mentioned that the Federal Reserve is far down the road of the tightening cycle.

The Reserve Bank of New Zealand (RBNZ) issued a supplementary news statement immediately after making the decision. It said, “Committee members agreed that monetary conditions needed to continue to tighten further.”

Commodities 

After industry data revealed that U.S. crude stocks dropped more rapidly than anticipated last week, oil prices climbed early on Wednesday. This highlighted supply tightness ahead of an impending European Union ban and G7 price restriction on Russian oil.

Crude and Brent oil prices increased by approximately one per cent yesterday as the United Arab Emirates, Kuwait, Iraq, and Algeria reaffirmed comments made by Saudi Arabia’s energy minister that the Organization of the Petroleum Exporting Countries (OPEC) and allies, collectively referred to as OPEC+, were not considering increasing oil production. The next meeting of OPEC+ to discuss production will take place on December 4.

Additional support for the market came from the unknown manner in which Russia would react to the proposals of the Group of Seven (G7) countries to place a ceiling on oil prices in Russia.