COVID Trouble In China, Fed Minutes Hit Dollar, CZ Crypto Fund

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By Geoffrey Smith — It’s Thanksgiving and the US stock markets are closed for a well-deserved rest. The rest of the world is giving thanks for a series of Fed minutes that have reinforced the “dovish pivot” narrative, crushing dollar and US bond yields and giving reprieve to battered currencies around the world. The big outlier is China, where the capital Beijing is returning to lockdown in all but name as COVID-19 cases hit a record high. European markets are higher after a surprising improvement in the German Ifo business confidence index. And Changpeng Zhao promises more details on its crypto recovery fund. Here’s what you need to know about the financial markets on Thursday November 24th.

1. Beijing goes back to lockdown after cases hit record high

Beijing has returned to isolation in all but name.

In several districts of the Chinese capital, people are being asked to work from home, while non-essential shops are closed and restaurants are only open for take-out.

Case numbers have tripled in the past week to an all-time high, a pattern repeated across the country as attempts to ease restrictions have inevitably led to a surge in infections.

The , which has fallen nearly 2% in the past 10 days on a growing wave of negative health news, has remained broadly stable.

2. Dollar weakens on Fed minutes

The dollar weakened and 10-year Treasury yields hit a seven-week low after the Federal Reserve’s latest policy meeting showed a solid majority in favor of slowing the pace of hikes amid growing signs of an economic slowdown .

Disinflation in the housing and goods sectors is in full swing, despite surprising strength on Wednesday.

By 06:20 AM ET, the , which tracks the greenback against a basket of developed economy currencies, fell 0.1% to 105.90, testing a three-month low, after returning to levels seen earlier. last time before the “Trussonomics” debacle. The note fell 2 basis points to 3.69%, while the note fell 1 basis point to 4.47%.

3. European stock markets up on Fed minutes, Ifo up

With US markets closed for the Thanksgiving holiday, attention was focused on Europe and Asia, where the trend was generally positive, thanks to the Fed minutes.

The big showpiece was China, where local indices fell as much as 0.6% as prospects of another economically damaging fight with COVID grew.

As of 06:20 ET, the dollar was up 0.5% to its highest in more than three months as a rebound promised some relief on the import cost front, easing pipeline pressure on .

Also helping sentiment was an improvement in , corroborating the rise in Wednesday’s S&P trade survey. The ‘expectations’ component of the Ifo index rose particularly markedly as the threat of gas rationing eased and the government’s massive aid package moved closer to taking effect.

4. Binance to Release More Details on Crypto Recovery Fund

Binance CEO Changpeng Zhao said he will release more details on his proposed fund to support the cryptocurrency industry following the FTX crash.

Zhao said there had been considerable interest in his idea during a meeting on Twitter Spaces earlier this month, despite the huge blow to confidence in the industry from revelations of excess, mismanagement and alleged wrongdoing at FTX. before it imploded.

Zhao’s fund is ostensibly aimed at preventing contagion from bringing down healthy crypto companies. Skeptics have suggested that his ultimate intent is to protect Binance itself from becoming the next domino to fall. Zhao insists that Binance’s financial stability is ensured.

5. Oil lower as COVID outlook darkens in China

Crude oil prices fell again as COVID news out of China worsened. China has been the key swing factor in most forecasts for global demand this year and next, and the prospect of widespread lockdowns over the winter – or a general collapse in consumer confidence if the virus spreading out of control – is still the biggest risk for those predictions. Fears that the economic woes could be exacerbated by civil unrest are also starting to grow, following violent protests at the Foxconn (TW:) iPhone factory in Zhengzhou earlier this week.

As of 06:45 am ET, prices were down 0.3% to $77.69 a barrel, while they fell 0.8% to $84.75 a barrel.

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