EU Business & Consumer Surveys, ECB Economic Bulletin;
Germany Ifo Joint Economic Forecast of German economic research
institutes, CPI data for Germany, North Rhine Westphalia, Bavaria,
Brandenburg, Hesse, Baden-Wuerttemberg, Saxony; France housing
starts; Italy PPI, consumer confidence survey, business confidence
survey; trading update from Diageo
Oil's gains following a drop in U.S. inventories may weigh on
sentiment. In Asia, stock benchmarks were mostly lower; the dollar
and Treasury yields steadied; while oil and gold futures rose.
Risk-off sentiment may weigh on European stocks, as investors
mulled factors including the impact of rising oil prices on
inflation, sapping risk sentiment.
Jeffrey J. Roach, chief economist at LPL Financial, said
investors should expect a choppy market from the trifecta of a
spike in energy prices, the restart of student loan payments in the
U.S., and a looming U.S. government shutdown due impasse over the
budget deficit in Congress.
Melissa Brown, head of applied research at Axioma, said there's
nervousness in the financial markets that the Federal Reserve will
still raise interest rates despite cooling inflation, so investors
are afraid that policymakers will "mess it up by going too
"We've already seen for the past couple of weeks the investor
sentiment, particularly in the U.S., has become more negative,"
Brown said. "...our view is if sentiment is negative, bad news is
going to be punished a lot. [If] good news is not [so] good, it's
certainly not going to be highly rewarded."
The dollar steadied in Asia amid holiday-thinned trading in
parts of the region. Rising Treasury yields and oil prices have
further damped sentiment, said Matt Simpson, market analyst at City
Worries about a possible U.S. government shutdown continue to
mount after Republicans rebuffed a short-term funding bill from the
Senate, adding to the downbeat mood for risk-taking, Simpson
Treasury yields are rising to more historically normal-looking
levels, but the speed of these moves is also giving way to concern
about the possibility that more cracks in financial markets will
emerge, similar to the crisis at regional banks seen earlier this
"The recent bear steepening in rates is likely being driven by a
number of factors including markets repricing for 'higher for
longer' Fed funds, worries about the impact of increased Treasury
supply, fears of persistently high oil prices, and technical
weakness," said TD Securities.
"A persistent selloff in rates also increases the risk of
'breaks' similar to the UK LDI episode or the SVB collapse," TD
said, referring to California's Silicon Valley Bank and the U.K.'s
liability-driven investment crisis.
Oil futures advanced in Asia, buoyed by a sharp drop in U.S.
inventories. The weekly EIA report showed crude oil inventories at
Cushing, a major storage hub, dropped below minimum operating
levels, said Edward Moya, senior market analyst at Oanda.
Brent crude is just a few dollars away from the $100/bbl level,
which could prompt further momentum buying if global leaders don't
do anything to attempt to "jawbone" prices lower, Moya added.
Read: Oil Trading is Going Haywire as Storage Tanks Run Dry
Gold edged higher early Thursday. USD likely holds the key to
the direction of gold prices for the foreseeable future, said CBA
analyst Vivek Dhar. The inverse relationship between gold futures
and USD has strengthened considerably over the past year, Dhar
Lead rose slightly, supported by supply issues. Global
inventories of the industrial metal have stayed low, in terms of
both tons and weeks of demand, BofA Global Research said. Also, the
primary production of lead has been disrupted in Europe and the
Americas, BofA added.
Iron ore futures advanced, supported by China's strong
industrial profit data, ANZ said. Despite China's property market
crisis, infrastructure work is getting underway in 4Q, ANZ
Meanwhile, Huatai Futures said macroeconomic policies and
possible replenishment of raw materials in the coming winter may
provide some positive sentiment.
TODAY'S TOP HEADLINES
Saudi Arabia and Russia Win Big in Gamble on Oil Cuts
Saudi Arabia and Russia have raked in billions of dollars in
extra oil revenues in recent months, despite pumping fewer barrels,
after their production cuts sent crude prices soaring.
The cutbacks were a risky strategy, both financially and
politically. But they appear to be paying off for the two most
important members of the Organization of the Petroleum Exporting
Countries and its Russia-led allies, or the OPEC+ cartel. Price
increases are more than making up for the reduction in sales
volume, according to calculations by consulting firm Energy
Standoff in Congress Brings Government to Brink of Shutdown
WASHINGTON-House Speaker Kevin McCarthy (R., Calif.) rebuffed a
bipartisan short-term funding bill from the Senate in favor of a
House Republican plan driven by conservatives, as dim prospects for
a deal raised the likelihood of a partial government shutdown
starting this weekend.
Many lawmakers now anticipate that Congress will fail to fund
the government past Sept. 30, a lapse that will partially close
federal agencies and temporarily withhold pay for federal workers
and active duty-military personnel.
More CFOs Pull Back Spending Plans Due to Higher Interest
More finance chiefs are cutting spending plans as higher
interest rates squeeze their bottom lines, according to a survey
published Wednesday by Duke University's Fuqua School of Business
and the Federal Reserve Banks of Atlanta and Richmond.
The Federal Reserve last week left interest rates unchanged at a
22-year high. The Fed most recently increased its benchmark
federal-funds rate in July to a range of between 5.25% and 5.5%, in
a continuing effort to combat inflation.
U.S. Crude-Oil Inventories Fall to Lowest Level of 2023
U.S. inventories of crude oil fell by more than expected last
week, hitting their lowest level of the year, according to data
released Wednesday by the Energy Information Administration.
Benchmark U.S. oil prices that were higher before the report
extended those gains afterward. The Nymex front-month crude
contract for November delivery was recently up 2.9% at $92.97 a
Billions of Dollars in Loans to Board Members Draw Spotlight to
Two of Abu Dhabi's biggest banks have reported billions of
dollars in loans in recent years tied to their boards of directors
that include prominent royal-family members, a practice widely
discouraged in the U.S. but still common in the Gulf even as its
financial institutions extend their global reach.
The bank issuing the most board-member debt was First Abu Dhabi
Bank, where the chairman is Sheikh Tahnoun bin Zayed Al Nahyan, the
country's national-security adviser and the brother of Sheikh
Mohamed bin Zayed Al Nahyan, the president of the United Arab
Emirates and head of Abu Dhabi's royal family. FAB, as the bank is
known, emerged as a potential global deal maker this year when it
made an unsuccessful run at buying U.K. lender Standard
UBS shares drop after report U.S. DOJ probing Credit Suisse over
Russian sanctions evasion
Shares of UBS Group AG came under pressure on Wednesday after a
report that the U.S. Justice Department suspects Credit Suisse
helped Russian clients evade sanctions and may be looking at
compliance failures at its new parent company.
Citing sources, Bloomberg News said subpoenas at one point sent
to multiple banks were now focused on the Swiss bank, Credit Suisse
which was taken over by UBS earlier this year. Those sources said
the Justice Department was in the early stages of its investigation
and that the outcome may be neither charges or a settlement, but
that UBS UBS CH:UBSG lawyers in the U.S. had been briefed on Credit
Suisse's potential exposure to violations.
Evergrande Share Trading Suspended in Hong Kong-Update
Shares of debt-laden China Evergrande have been suspended from
trading on the Hong Kong exchange, a month after they resumed
trading following a 17-month trading halt.
China Evergrande New Energy Vehicle Group and Evergrande
Property Services also called for a trading halt on Thursday.
X CEO Linda Yaccarino Says Platform Should Turn Profit in
X Corp. Chief Executive Linda Yaccarino said on Wednesday the
company is "just about break even" in terms of operating cash-flow
and should turn a profit early next year.Yaccarino, NBCUniversal's
former ad-sales czar who joined the company, formerly called
Twitter, in June, has faced questions about how much she can
rebuild X's ad business after tumult under company owner Elon Musk,
who acquired the platform late last year and swiftly cut thousands
of jobs, upended features like verification and loosened
Yaccarino spoke at the Code Conference in Orange County, Calif.,
in an interview with CNBC reporter Julia Boorstin that became
awkward at times, including when the CEO was pressed about the
company's user and engagement numbers.
iPhone 15 Pro Owners Complain About Overheating Problems
The new iPhone 15 Pro may be too hot for some to handle.
Apple's priciest new iPhones are heating up in some scenarios,
reaching high temperatures that make them difficult to touch at
certain times, according to reviews, tests by The Wall Street
Journal and social-media posts from buyers in China, the U.S. and
Canada. Some iPhone 14 Pro owners have noticed similar hot
temperatures over the past year.
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Expected Major Events for Thursday
04:30/NED: Sep Producer confidence survey
05:30/GER: Sep North Rhine Westphalia CPI
06:00/DEN: Aug Retail Sales Index
06:00/NOR: Aug Retail Sales
06:30/HUN: Aug PPI
06:45/FRA: Aug Housing starts
07:00/SVK: Sep Business tendency survey
07:00/SVK: Sep Economic sentiment indicator
07:00/SPN: Sep Flash Estimate CPI
07:00/SPN: Aug Retail Sales
08:00/ITA: Sep Consumer Confidence Survey
08:00/ITA: Sep Business Confidence Survey
08:00/ICE: Sep CPI
08:00/GER: Sep Brandenburg CPI
08:00/GER: Sep Bavaria CPI
08:00/GER: Sep Hesse CPI
08:00/GER: Sep Baden-Wuerttemberg CPI
08:00/GER: Ifo Joint Economic Forecast of German economic
09:00/MLT: Aug PPI
09:00/CYP: Jul Industrial Production Index
09:00/EU: Sep Business & Consumer Surveys - Business Climate
Indicator & Economic Sentiment Indicator
09:00/ITA: Aug PPI
09:00/GER: Sep Saxony CPI
09:30/BEL: Sep CPI
12:00/GER: Sep Provisional CPI
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(END) Dow Jones Newswires
September 28, 2023 00:33 ET (04:33 GMT)
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