A RELATIVELY QUIET DAY

Led by technology, equities declined as worries mount that China may tighten COVID curbs after a string of reported deaths.  Energy issues reversed direction mid-day following the Saudi denial of any discussions about increasing oil production by 500,000 day to combat the loss of Russian production in the beginning of December, the result of previous passed embargo restrictions.

OPEC+ decided in October to cut production by 2 million barrels a day and such would have been a major reversal of recently enacted policy.

Markets tepidly met San Francisco’s President Daly’s comments warning that too much tightening could be “unnecessarily painful” for the economy.

All are closely watching what Fed speakers say about the outlook for interest rates.  While several central bank officials in recent days have reiterated their resolved to keep raising rates, they differ on how far they will go, as evidenced by Collin’s remarks that are noted below.

Boston Fed President Collins reiterated her view that options are open foe this size of the December interest rate increase, including the possibility of a 75-bps move.

What will happen today?

Last night the foreign markets were mixed.  London was up 0.53%, Paris down 0.18% and Frankfurt down 0.02%.  China was up 0.13%, Japan up 0.61% and Hang Seng down 1.31%.

Futures are flat as words from Federal Reserve officials are parsed for clues on the pace if interest rate hikes and assessing the impact of China’s widening COVID lockdowns. The 10-year is up 11/32 to yield 3.79%.

 

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