European markets climb ahead of FOMC minutes


After getting off to an initially positive start, with the FTSE100 at a touching distance of 7,500, the session was fairly lackluster as investors assess tonight’s FOMC minutes release amid a weakening economic outlook, after that the PMIs all indicated further economic weakness in Q4. It also raises the possibility that this will lead central banks to refrain from any hikes as aggressive as previously thought.

With the World Cup well underway, we are seeing a second day of wins for Flutter Entertainment and Entain. The possibility of shocking results like the Argentina, Saudi Arabia game has the potential to lead to an increase in betting habits as the tournament progresses.

Halfords shares fell despite a 10.2% rise in total first-half revenue to £765.7m, but profits fell sharply from £64.3m a year ago at £29.3m, which, while better than pre-pandemic levels, was on earnings that were somewhat lower.

On the forecast, Halfords was quite pessimistic, warning that underlying pre-tax profits for the full year would be at the lower end of its previous forecast of £65-75m. This seems to be mainly due to the underperformance of its retail stores, which saw their revenues shrink in the first half compared to a year ago, while expecting its automotive centers to remain resilient. Revenue here has increased by more than £109.1m since the same period last year, helped by the acquisition of Lodge Tyre.

The long hot summer has been a boon for the likes of Britvic as the drink maker recorded a 15.5% rise in revenue to £1.62bn, which helped boost after-tax profits by 45.3% to £140.2m sterling. With no lockdown restrictions to contend with and hospitality returning, the business appears to have benefited from the double boost of a pandemic rebound and one of the hottest summers on record in the UK .

Boohoo shares fell sharply after reports emerged that workers at its Burnley warehouses face grueling working conditions. Following a 2020 scandal that saw some of the company’s suppliers paid less than minimum wage, there are concerns that despite an overhaul of its oversight procedures, some mindsets may be harder to change.


US markets opened slightly higher after weekly jobless claims and appear to be treading water ahead of the release of tonight’s FOMC minutes and after weekly jobless claims rose unexpectedly more than expected to 240,000 vs. 223,000. The latest November PMIs added to the positive tone, after unexpectedly falling into contractionary territory for manufacturing and services as well.

The poor numbers are also weighing on the US dollar as well as yields, adding to a narrative that rate hikes are working and the Fed may not have to adopt a full 5% terminal rate.

Manchester United shares are up sharply again following reports that the Glazers are open to a full sale of their stake in the club. Shares rose sharply yesterday on hopes that a sale process was imminent, with the club confirming in a statement that a process was underway.

resume Shares rose after the company announced it would cut 6,000 jobs over the next 3 years as the PC market struggled with weakening PC demand. In the third quarter, revenue was well below expectations due to weaker demand for PCs and its fourth quarter numbers also disappointed, with revenue coming in at $14.8 billion, although profits edged down to CA$0.85. For the new fiscal year 2023, the company offered an uncertain outlook with first quarter earnings expected to reach C$0.70 per share and adjustments for the full year. EPS between CA$3.20 and CA$3.60 per share.

At the end of the third trimester, Deere and Co lowered its full-year earnings forecast to $7 billion to $7.2 billion from $7 billion to $7.4 billion. due to downward pressure on operating margins. This morning’s fourth quarter numbers seem to suggest there was no need for caution, with fourth quarter revenue of $15.54 billion and profit of C$7.44, although above expectations of CA$7.10. Full-year profits were $7.13 billion, while revenue for the year was $52.58 billion, up 19% as the company managed to pass on price increases to its clients. The farm equipment maker also raised its 2023 profit forecast to between $8 billion and $8.5 billion, due to strong demand for tractors from farmers who are fetching higher prices for their crops.


The US dollar was already in decline even before the latest services and manufacturing PMIs unexpectedly slipped into contractionary territory in November. The latest 1-year inflation expectations from the University of Michigan also surprisingly fell from 5.1% to 4.9%.

The New Zealand dollar is one of the best performers against the US dollar after the RBNZ raised rates by 75 basis points, along with its projection of where interest rates are likely to peak.

The Pound also looks set for another strong day today, pushing above the 1.2000 area and to three-month highs against the US Dollar, as well as hitting record highs against the Euro in almost 3 weeks.

The rise appears to have coincided with news that the UK Supreme Court had ruled that the Scottish government had no right to hold a unilateral referendum without the UK government’s consent. Although a bit of a relief, the ruling will do little to alter the independence narrative that is a staple of the Scottish government.


Reports that the EU is considering capping Russian crude oil prices are dampening the broader oil complex, although the OECD’s pessimistic projections for the economic outlook for next year don’t really help either. As China also grapples with a record number of covid cases, the macroeconomic outlook continued to deteriorate for oil this week, with prices on course to fall for the third week in a row.


Oil prices remained very much in the spotlight on Tuesday, with OPEC hinting that it could consider cutting production in something of a reversal from its stance a few days ago. Crude edged higher as a result, but continues to trade near two-month lows. One-day flight over West Texas Intermediate printed 62.65% vs. 41.96% on the month.

This again fueled the price of oil and gas producing stocks, with CMC’s proprietary basket covering the sector finding support. The ten components thus made significant gains, with a daily flight of 59.2% against 49.16% for the month.

ADR DouYu managed to find support after the rout earlier in the week due to these disappointing results. The underlying appreciated by less than 2%, but this was still enough to take the daily volatility of the video streaming provider to 221.9% against 195.22% over the month.

Elsewhere, activity has been rather more limited, with fiat currency pairs all showing daily volatility levels below their one-month equivalents, while cryptos also remain somewhat subdued.

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