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U.S. CPI, SEC charges SBF with fraud, OPEC report – what’s moving markets


U.S. CPI, SEC charges SBF with fraud, OPEC report – what’s moving markets By

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Economy 1 hour ago (Dec 13, 2022 12:36)

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By Geoffrey Smith — The U.S. releases November inflation data as the Federal Reserve sits down for a two-day meeting. The SEC charges Sam Bankman-Fried with fraud over the collapse of FTX, while Binance suspends some withdrawals as a negative report sends customer redemption requests spiking. Stocks are set to extend Monday’s gains at the opening, helped by results from Oracle after the bell. China appears to get cold feet about reopening its economy as COVID-19 cases surges, and OPEC’s monthly report and U.S. inventory data will cast fresh light on the state of the oil market. Here’s what you need to know in financial markets on Tuesday, December 13.

1. November CPI has a job to meet raised expectations

The U.S. releases consumer inflation data for November at 08:30 ET (13:30 GMT) as the Federal Reserve starts a two-day meeting that is expected to end with a smaller interest rate increase than in recent months.

U.S. stocks had taken off on Monday after JPMorgan analysts told clients that the market could rise 10% if the headline annual rate falls below 7%, which they said would be a large enough drop to sway the Fed’s thinking by the time chair Jerome Powell gets round to giving his guidance for next year.

That would require quite a big downside surprise, given that the consensus is for the headline rate to fall to only 7.3% from 7.7% in October. Inflation has generally surprised to the upside this year, with services inflation, in particular, running ahead of expectations in recent months.

2. SEC charges SBF with fraud; Binance suspends USDC withdrawals

The world’s biggest crypto exchange, Binance, suspended withdrawals of USD Coin “temporarily”, citing a technical capacity bottleneck and saying that redemption demands were too much to handle outside of U.S. opening hours.

The news comes a day after Reuters reported that various figures in the U.S. Department of Justice are ready to bring charges against the exchange in connection with a three-year investigation into suspected money laundering. Others at the DoJ are still pressing for more evidence to be collected first.

Any charges would be another sharp blow to the international standing of cryptocurrency as an asset class, given Binance’s dominance of the sector. They would follow hard on the heels of the arrest of Sam Bankman-Fried in the Bahamas on Monday at the request of U.S. prosecutors. ‘SBF’ was charged with fraud early Monday in the U.S. by the Securities and Exchange Commission.

Bitcoin prices rose 2.7% on the news as some sought the relative safety of the cryptocurrency still seen by some as “digital gold”.

3. Stocks set to extend gains at open, helped by Oracle numbers

U.S. stock markets are set to open higher, extending the gains they made in late trading on Monday on the back of the JPMorgan note.

By 06:20 ET (11:20 GMT), Dow Jones futures were up 136 points, or 0.4%, while S&P 500 futures were up 0.4%, and Nasdaq 100 futures were up 0.5%.

Stocks likely to be in focus later include Oracle (NYSE:ORCL), which posted better-than-expected results after the bell on Monday, giving a firm tone to business software names in premarket. Also in focus will be Tesla (NASDAQ:TSLA), which touched a new two-year low on Monday amid concerns that CEO Elon Musk is increasingly distracted by the culture wars he has triggered with his acquisition of Twitter.

4. China delays key economic meeting

China postponed a key meeting on economic policy, Bloomberg reported, in what appeared to be a bout of second thoughts about a rapid relaxation of the country’s COVID-19 restrictions.

The Central Economic Work Council – usually chaired by President Xi Jinping and attended by officials from the Politburo, provincial governors, and heads of government agencies and financial institutions – was due to meet on Thursday to discuss the coming year’s policy objectives and would typically run for three days.

The CEWC wasn’t expected to announce a growth target for next year but was expected to discuss the thorny problem of how to balance public health issues with the needs of its citizens after nearly three years of public health restrictions. Chinese equity markets fell, while the yuan remained flat.

5. Oil rises as dollar weakens; OPEC monthly report, API inventories eyed

Crude oil prices rose, lifted indirectly by the JPMorgan report that gave broad support to risk assets and cheapened the dollar.

By 06:45 ET, U.S. crude prices were up 0.5% at $73.55 a barrel, while Brent was up 0.9% at $78.67 a barrel.

The market’s main focus will be on the release of OPEC’s monthly report, which will contain new forecasts for global oil demand and supply. There will also be weekly inventory data from the American Petroleum Institute.

U.S. CPI, SEC charges SBF with fraud, OPEC report – what’s moving markets

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