EU jobless rate; UK services PMI, Bank of England rate decision; trading updates from BMW, Solvay, Hugo Boss, HeidelbergCement, BNP Paribas, Sainsbury, BT Group, Stellantis, Euronext, ING Group, Babcock International, Rolls-Royce, AXA
European shares may track Wall Street lower. In Asia, stock bechmarks declines; Treasury yields rose; the dollar was steady; while oil and gold were both weaker.
European stocks could head lower Thursday after the Federal Reserve again sharply raised interest rates and hinted at a possible slowdown in the pace of increases, but indicated it still has work to do in its fight against inflation.
Fed Chairman Jerome Powell said the central bank has "a ways to go" in tightening policy enough to bring inflation down to its 2% target, and for that reason, it was premature to talk about pausing rate increases.
The Fed's next meeting is set for Dec. 13-14 and investors are increasingly betting on a 50- or even 25-basis-point hike, down from 75 in the last four meetings.
But BNP Paribas's Carl Riccadonna stressed the fact that Powell referred to a possibly higher terminal rate.
"This is a stickier inflation regime and for that reason the Fed has to do more and they have to hold that level for a longer period of time and that's the message that we should really be taking away."
The Bank of England rate decision is expected later in the day, with markets forecasting a 75-basis-point hike.
Read: Bank of England Set to Lift Rates by the Most in Decades, Matching the Fed
The dollar was steady after the Fed raised rates as expected.
Fed Chair Powell's speech was perceived to be hawkish, MUFG Bank said. His comments suggest a higher terminal rate than what is indicated in September's dot plot at 4.625% and the stance of maintaining rates "higher for longer" is still at play, MUFG Bank said.
Powell acknowledged that a strong dollar is posing challenges for some countries, but argued that "the world's not going to be better off" if the U.S. doesn't get inflation under control.
Treasury yields rose, extending gains on Powell's comments to reporters that it is "very premature" to be thinking of a pause in interest rate hikes.
"Powell is dampening the prospects of a pause saying it's premature to think on those terms," Spartan Capital said.
"The 75bp hike was as expected, but the change in the Fed's statement in the third paragraph emphasizes two things we already knew: They will raise rates as high as it takes to fight inflation, and they'll take into account the nature of monetary policy when they set rates accordingly," FHN Financial said.
"The addition is then somewhat of a mystery for now, though it could be communicating to markets that a slowdown in hikes does not necessarily mean a lower-than-expected terminal rate," FHN Financial added.
Oil prices fell in Asia, pulling back from overnight gains as investors continued to digest the implications of the Fed decision.
ANZ reckons that traders will increasingly be focused on supply-side issues, as the deadline for Russian oil bans approaches.
Meanwhile, OPEC is also scheduled to cut output following its meeting in September.
"The 2mb/d reduction agreed to at the meeting is likely to be only half that amount as most producers were already struggling to hit their previous quotas," ANZ said. This should keep supply tight over the coming months, it added.
Gold prices were slightly lower in Asia, as traders digested shifting expectations around the Fed's rate path.
An FOMC statement suggested that the Fed is considering a slowdown in the pace of tightening, but Fed Chair Powell highlighted that the ultimate level of interest rates will be higher than previously expected, CBA noted.
Aluminum rose in Asia amid continued speculation of an easing in China's zero-Covid policy.
The speculation is leading to modest buying of the metal by commodity trading advisers, TD Securities said.
However, aluminum prices will probably have to stay above $2,225 a ton to avoid a whipsaw in positioning, TD Securities added.
Chinese iron-ore futures rose, building on gains the past two sessions amid speculation about a potential easing of Covid-19 restrictions in China.
Ferrous metals were extending their rebound amid more upbeat sentiment, Baocheng Futures said.
Nevertheless, iron-ore prices may stay weak in the medium term given rising supply and lower demand, it said.
Federal Reserve Hikes by 0.75 Point, Signals Slower Increases but Ultimately Higher Rates
WASHINGTON-The Federal Reserve lifted interest rates by another 0.75 percentage point to combat inflation and signaled plans to keep raising them, possibly in smaller increments but to higher levels than previously anticipated.
The increase approved Wednesday, the Fed's fourth consecutive 0.75-point rate rise, lifts the central bank's benchmark federal-funds to a range between 3.75% and 4%. After the decision, Chairman Jerome Powell said officials would contemplate a smaller hike at their next meeting in December. But he cautioned that they might raise borrowing costs next year more than they have projected.
China Caixin Services PMI Fell Further in October
A private gauge of China's services-sector activity slipped further into contraction in October, reflecting the impact of stringent restrictions to curb Covid-19 outbreaks sweeping the country.
The Caixin services purchasing managers index dropped to 48.4 in October from 49.3 in September, Caixin Media Co. and S&P Global said Thursday. A reading below the 50 mark indicates activity contraction.
Canada Orders Chinese Companies to Divest From Miners After Security Review
Canada on Wednesday ordered three Chinese companies to divest their shares from domestic companies involved in extracting critical minerals, citing national-security concerns.
The move marks the latest step by Canada and other developed-world economies to protect their critical mineral assets. Demand for minerals such as cobalt, lithium and nickel is surging as the automotive industry shifts to electric power. Canada, along with allies including the U.S. and Australia, are concerned about China's dominance over the market and have begun to funnel money to ore refiners and battery makers because they want to counterbalance their Asian rival.
Glencore Faces Further Bribery Penalties in the U.K.
LONDON-British prosecutors are seeking over $200 million in penalties from Glencore PLC to resolve a probe into bribery in Africa, and they said they now want to prosecute a number of the commodities giant's former executives.
The U.K.'s Serious Fraud Office on Wednesday asked a court to impose the penalties, which it said could include Britain's largest corporate confiscation order to claw back money made from crime. A judge is set to decide on the size of the penalty Thursday.
Poland Begins Building Wall to Prevent Russia From Pushing Migrants Into Europe
WARSAW-Polish army engineers began building a razor-wire fence across the country's 130-mile border with Russia, the latest country in Europe's east to construct such a barrier, in what Poland's government described as a bid to prevent Moscow from encouraging asylum seekers to cross overland into the European Union.
The fence will span the entire length of Poland's border with the Russian exclave of Kaliningrad, Defense Minister Mariusz Blaszczak told reporters Wednesday. The construction began, he said, in response to concerns that Moscow would seek to encourage asylum seekers to fly into the exclave and enter the EU via the Polish border.
Iran Denies Planning Attacks on Saudi Arabia, Iraq
Iran on Wednesday denied it was planning an attack on Saudi Arabia or Iraq amid civil unrest calling for the downfall of the Islamic Republic, insisting that it was trying to build constructive relations with its Middle East neighbors.
The statement came a day after The Wall Street Journal reported that Saudi Arabia had shared intelligence with Washington indicating an imminent attack from Iran, putting the American military and others in the Middle East on an elevated alert level. Saudi officials said their intelligence showed Iran is poised to carry out attacks on both the kingdom and Erbil, Iraq, and the White House said the Saudi information was worrisome.
Russian Occupation Authorities Plan to Move 70,000 From Ukraine's Kherson Area
ODESSA, Ukraine-Russian officials in occupied Kherson said they would begin mandatory transfers of tens of thousands of residents from parts of the region, as Ukraine continues its offensive to recapture the south.
The officials said that starting Sunday they would begin relocating residents from the Kakhovsky district on the east bank of the Dnipro River due to what they claim is the possibility of a Ukrainian attack on a strategic dam nearby.
Chip Maker Qualcomm Sees Smartphone Slump Worsening
Qualcomm Inc. again slashed its forecast for smartphone shipments and gave a gloomier than expected sales outlook, joining other chip makers confronting a sharp turn in consumer demand after a pandemic-fueled boom.
The designer of mobile-phone chips cut its forecast to a low-double-digit percentage decline from an earlier forecast of a mid-single-digit fall, indicating that the downward trend in the handset market is accelerating. Qualcomm, in reporting quarterly results on Wednesday, said it projected up to $10 billion of sales for the current quarter, well short of Wall Street estimates of around $12 billion.
Write to singaporeeditors@dowjones.com
Expected Major Events for Thursday
01:01/IRL: Oct Ireland Services PMI
07:00/EU: 3Q New passenger car registrations in Europe by fuel type
08:00/CZE: 3Q LFSS Employment & Unemployment
(MORE TO FOLLOW) Dow Jones Newswires
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