Close up of red and green numbers on ASX board

ASX poised to rise, Euro shares soar on hopes of smaller US rate hikes, Binance $1B crypto bailout

Australian stocks are poised to rise on Friday after European stocks rose overnight on hopes of smaller interest rate hikes from the US, boosting investor confidence.

ASX futures were up 14 points, or 0.2 percent, to 7,267.

The Australian dollar rose 0.5 percent to 67.62 US cents.

Stocks hit a two-month high on Thursday and the US dollar hit a three-month high after the Federal Reserve signaled smaller rate hikes than next month and a message from Frankfurt that the European Central Bank (ECB) will raise interest rates. rose rapidly to its low level. on.

Wall Street was closed for the Thanksgiving public holiday, so it was up to Europe to continue the recovery in market confidence.

“Fed minutes signaled that some sensible voices were trying to suppress Fed Chairman Powell’s relentless ‘raise, raise, raise’ slogans,” said Paul Donovan, UBS Chief Economist.

According to the minutes released Wednesday, a “significant majority” of Fed policymakers agreed that slowing the pace of rate hikes “probably soon would be appropriate”.

But Mr. Donovan cautioned that there is no real stop signal yet, and various Fed members thought rates may need to be “a little higher” than expected.

Futures markets are showing investors that US interest rates peaked at just over 5 percent through May and are pricing in a roughly 75 percent chance that the Fed will now move to 50 basis point increases, instead of the 75 basis points it applied recently.

The ECB’s equivalent minutes on Thursday showed rate-makers feared that inflation might now be stabilizing in the eurozone.

Isabel Schnabel, one of the most influential Executive Board members, also said: “The data so far shows that even as we approach ‘neutral’ rate estimates, the room for slowing the pace of interest rate adjustments remains limited.”

For the foreign exchange markets, this meant a continued seven-week sell-off in the dollar.

The euro rose as high as $1.0447 and approached its four-month high of $1.0481, while the US dollar fell 0.6 percent against the Japanese yen to 138.70 yen and $1.20 against the pound. .

“The dollar may come under some more pressure, but it probably has a lot of downside with the Fed right now,” ING analysts wrote.

Meanwhile, the pan-European STOXX 600 index rose 0.5 percent, Germany’s DAX 0.8 percent and the UK’s FTSE one percentage point.

Binance billion dollar crypto rescue package

Meanwhile, cryptocurrency exchange Binance said on Thursday it has committed US$1 billion to create an industry recovery initiative (IRI) to invest in companies in the digital assets sector.

This move comes at a time when the crypto market is reeling from the collapse of FTX seeking Chapter 11 bankruptcy protection in the United States.

The collapse of one of the world’s largest cryptocurrency exchanges has also raised concerns about the industry’s ability to attract investment from venture capital and private equity giants.

Binance said it plans to increase the commitment amount to $2 billion in the near future, depending on the need.

The crypto exchange said in a statement, “This initiative will take about six months and it will take about six months to complete in its investment structure – tokens, fiat, equities, convertibles, debt, lines of credit, etc.

He said such funding would help “reduce further gradual negative effects of FTX” without giving an exact figure for the recovery.

Many crypto companies have been reviving since the collapse of FTX, and many calculate their exposure to the beleaguered exchange in the millions.

goods

Spot gold was up 0.5 percent at $1,775.10.

In oil markets, Brent crude fell 0.3 percent to $85.12 per barrel, while West Texas crude was green but almost flat at $77.96 a barrel.

ABC News/Reuters

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