By Geoffrey Smith
Investing.com -- It's Thanksgiving, and U.S. stock markets are closed for a well-deserved rest. The rest of the world is giving thanks for a set of Fed minutes that strengthened the 'dovish pivot' narrative, squashing the dollar and U.S. bond yields and giving respite to battered currencies the world over. The big outlier is China, where the capital Beijing is heading back into lockdown in all but name, as COVID-19 cases hit a record high. European markets are higher after a surprise improvement in the Ifo index of German business confidence. And Changpeng Zhao promises more details on his crypto recovery fund. Here's what you need to know in financial markets on Thursday, 24th November.
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1. Beijing heads back into lockdown as cases hit record
Beijing is back in lockdown in all but name.
In several of the Chinese capital's districts, people are being asked to work from home, while non-essential shops are shut and restaurants are open for takeaway only.
Case numbers have tripled in the last week to the highest on record, a pattern repeated across the country as tentative attempts to relax restrictions have inevitably brought about a rise in infections.
The offshore yuan, which has fallen nearly 2% in the last 10 days amid a growing wave of negative news on the health front, was broadly steady.
2. Dollar weakens on Fed minutes
The dollar weakened and 10-year Treasury yields tested a seven-week low after the minutes of the last Federal Reserve policy meeting showed a solid majority in favor of slowing the pace of interest rate increases amid growing signs of an economic slowdown.
Disinflation in housing and merchandise goods is in full swing, despite surprising strength in new home sales and durable goods reported on Wednesday.
By 06:20 ET, the dollar index, which tracks the greenback against a basket of developed economy currencies, was down 0.1% at 105.90, testing a three-month low, as sterling returned to levels last seen before the "Trussonomics" debacle. The 10-year Treasury yield was down 2 basis points at 3.69%, while the 2-year note was down 1 basis point at 4.47%.
3. European stocks advance on Fed minutes, Ifo improvement
With U.S. markets closed for the Thanksgiving holiday, the focus has been on Europe and Asia, where the trend has been generally positive, thanks to the Fed minutes.
The big standout has been China, where local indices fell by as much as 0.6% as the prospects for another economically damaging fight with COVID grew.
By 06:20 ET, the Euro Stoxx 600 was up 0.5% at its highest in over three months, as a rebounding euro promised some relief on the import cost front, reducing the pipeline pressure on inflation.