🎲All eyes on the FOMC minutes🗽

Yes, that’s right. After a broad-based decline on Monday, the equity market rebounded on Tuesday as investors looked forward to dovish FOMC minutes. This gave oil prices support, though a mild one. 

Market participants put behind the weakness seen from China’s potential Covid lockdown, given that the country is a net oil importer. Moreover, Saudi Arabia denied news that it is exploring an increase in oil production, giving the price a boost. In recent months, oil prices have been sensitive to the prospects of China’s opening up its economy. 

🎯The big deal: FOMC minutes📊

Before Thanksgiving on Thursday, traders will have to clear a hurdle. There is a wish for the Fed not to over-hike to combat inflation, and that’s what markets want to see in the FOMC meeting minutes. 

Investors are warming up to the idea of a recession but are hopeful of avoiding a deep one. And that expectation rest upon whether there is a possible shift in the steepness of rate increase to a milder one and any hints of slight pivot in policy changes. So you bet that everyone will be closely parsing the minutes for clues. 

The bond market remains relatively stable as fear is easing. Both the 2 and 10 years bond yield moderately retreat on a more cautious note. 

💣Bitcoin: Woes prolonged🧸

When we thought the worst nightmare of the FTX saga was gone, Genesis, a leading crypto lending, signalled the need to raise cash. This pushes Bitcoin to hit a low of around $15,480. The failures of FTX are still sending after-math waves across different related players giving an inclination to large withdrawals. 

Nonetheless, Genesis maintained that it has no plans to file for bankruptcy in the near term and is having a good conversation with its creditors. 

📮What’s on the menu today?📖

There is a stream of economic data before Thanksgiving. 

At 9 pm, we will have the building permit data, which we expect to remain reasonably stable at 1.526M. 

Core Durable Goods Order for Oct (MoM) will be released at 9.30 pm. We expect a return to growth of 0.1% compared to a decline of 0.5% in the prior period.

At the same time, Initial Jobless Claims is expected to meet 225K expectations. Robust job data will give Fed the confidence to maintain its pursuit of hawkishness.

Manufacturing PMI for Nov is expected to moderate to 50.0 from 50.4 when released at 10.45 pm. The same applies to Service PMI, released at the same time. Contraction is still likely to be at 47.9. 

New Home Sales for October data will be given at 11 pm. A meaningful decline to 570K from 603K is expected. 

Finally, we arrive at the FOMC meeting minutes at 3 am, which is a potential market mover.