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Business News: Eurozone issues, US markets await announcement

By Jenny McCall

12:52, 2 November 2021

Pederal reserve system symbol on hundred dollar bill
US markets await Federal Reserve announcement – Photo: Shutterstock

Tuesday mid-afternoon business news started with Eurozone woes as IHS Markit survey announced October’s factory growth was hit by supply chain issues. US stock index futures fell on Tuesday, ahead of the Federal Reserve meeting this week. 

Kicking off the big central bank week was the Reserve Bank of Australia (RBA) this morning, which relaxed its control on the yield curve, making it the first central bank to fight against a post pandemic rise in prices. RBA also indicated it would not rush to raise short-term interest rates, holding them within its target range of 2% to 3%.

Today and tomorrow the US Federal Reserve meet, followed by the Bank of England later this week.

Climate change hit the headlines today as world leaders met at COP26. Following this mornings announcement on deforestation the Biden administration announced plans to curb US emissionsof methane, a potent greenhouse gas. Oil and gas company BP posts $3.3bn profits in its quarter three trading statement. 

Chart of the day 

 Organisation of Petroleum Exporting Countries and Allies (OPEC+), which is under pressure from consumers to help cool the market. But the alliance, which is meeting on Thursday, is expected to stick to policy. 

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Top business and economic news today

  • US Federal Reserve - U.S. Treasury yields fell to 1.555% on Tuesday in anticipation of the Federal reserve meeting starting today and concluding on Wednesday. The Fed is expected to scale back on its enormous pandemic-related stimulus programme.
  • UK Stocks - The FTSE 100 was down today, as investors waited for Bank of England and the US Federal Reserve annoucments on intesrt rates and inflation. US stock index futures fell early on Tuesday morning, as investors waited cautiously for the Federal Reserve's
  • Eurozone woes - German manufacturing output fell to its lowest level in nine months in October – to 57.8 from September’s 58.4 –  due to supply chain pressures caused by Covid-19. Eurozone manufacturing was further hampered by global supply chain issues in October, with the Purchasing Managers’ Index (PMI) for the sector falling to an eight-month low. 
  • Oil prices - Oil fell further below $85 a barrel on Tuesday.
  • OPEC+ - Under pressure to increase oil supply from consumers but some believe it will stick to policy. 
  • COP26 - Biden commits to stop methane leaks from oil and gas well.
  • Bank of England - As Rishi Sunak ends his budget the Bank of England take over and on Thursday it will hopefully put an end to speculation on whether it will raise interest rates. If it does this will be the first rise since the onset of Covid-19

Markets today

Stocks

  • US stock index futures fell early on Tuesday morning, as investors waited cautiously for the Federal Reserve’s highly expected move to start tapering monthly bond purchases. Dow Jones was down 0.03%, followed by the S&P, which rebounded 0.12% and Nasdaq 0.2%

Oil

  • Prices steadied near $85 a barrel on Tuesday, supported by signs that supply from OPEC and other producers is falling short. 

Gold:

  • Gold prices were low ahead of the US Fed meeting this week

Forex: 

  • The US Dollar was subdued ahead of Fed meeting.

Crypto:

  • Polkadot token became the latest cryptocurrency to hit an all-time high on Tuesday. Bitcoin rose 4.1% and Ethereum rose 3.70%. 

What to watch

  1. Pharma giant Pfizer increased its full year sales forecast for its Covid-19 vaccine by 7.5% to $36 billion.

  2. BP posted $3.3 billion third-quarter profit, beating estimates as oil prices surge

  3. Elon Musk’s Tesla is recalling almost 12,000 cars sold in the US since 2017, due to a communication error that could lead to a false forward-collision warning or unexpected activation of the emergency brakes, the National Highway Traffic Safety Administration (NHTSA) said Tuesday.

  4. Tesla Inc stocks fell 5.2% after CEO says its yet to sign Hertz rental car contract. 

  5. Estee Lauder reduced its full-year sales forecast on Tuesday, signaling a bigger hit to demand.

  6. Under Armour Inc increased its annual revenue and profit forecasts on Tuesday, as-work from home and hybrid consumers seek out more causal relaxed looks.

Read more: Business news: OPEC+ meeting today, RBA keeps cash rate at 0.1%

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