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A gauge of global stocks headed for the highest level in more than two months yesterday and the dollar fell after Federal Reserve meeting minutes showed support for tapering interest-rate increases.
Japanese, South Korean and Australian equities benchmarks advanced while Chinese gauges fluctuated. US futures climbed after the S&P 500 closed at a two-month high Wednesday before the Thanksgiving holiday. The moves in Hong Kong and the mainland came as investors weighed the impact of record Covid-19 cases against signs of loosening monetary conditions. Official comments broadcast Wednesday indicated the People’s Bank of China would allow banks to reduce capital reserves to stimulate growth. China’s zero-Covid policy has had “a significant effect on consumption” while the property crisis is “affecting investment in the sector and affecting property developers,” Gita Gopinath, first deputy managing director for the International Monetary Fund, said in an interview with Bloomberg Television. Government bond yields edged lower in Australia and New Zealand after Treasury yields fell Wednesday along with the dollar.
A gauge of the greenback slid further Thursday to levels not seen since August on a closing price basis. There will be no trading in Treasuries due to the US holiday. Minutes from the Fed gathering earlier this month indicated several officials backed the need to moderate the pace of rate hikes, even as some underscored the need for a higher terminal rate.
This adds weight to expectations the central bank will raise rates by 50 basis points next month, ending a run of jumbo 75 basis point increases. – Bloomberg
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