Marketmind: Relief, hope and speculation

A look at the day ahead in European and global markets from Ankur Banerjee

Investors have been looking for just about any positive sign to pick up beaten down Hong Kong and China stocks. And on Friday, they got a new reason too.

Renewed speculation over an imminent relaxation of China’s COVID-19 curbs alongside reports that the initial U.S. inspection of Chinese company audits was completed ahead of schedule lifted investor sentiment, after hawkish comments from Federal Reserve Chair Jerome Powell earlier rattled markets.

Earlier this week, rumours based on an unverified social media note that China was planning a reopening in March led to a sharp rally. The rumour was shot down almost immediately but investors it seems remain hopeful even as COVID cases in China climb.

Asian stocks are up, the dollar is retreating and the yuan has rebounded. And in the background lurks the Fed and its hawkish policy, with U.S. payrolls report due on Friday. Economists polled by Reuters expect non-farm payrolls to have increased by 200,000 jobs in October and any upside surprise will embolden the central bank’s stance.

Meanwhile, sterling was up 0.54%, recouping some of its losses from a 2% slide after the Bank of England said that rates may go up by less than markets have priced in.

Over in the corporate world, Twitter, now owned by Elon Musk, will tell employees by email on Friday whether they have been laid off, after temporarily closing its offices and preventing staff access, according to a memo seen by Reuters.

Key developments that could influence markets on Friday:

Economic events: U.S. Oct non-farm payrolls report; Canada Oct jobs

Speaker: ECB Vice-President Luis de Guindos

Earnings on the deck: Hershey, Duke Energy (NYSE:), Telefonica (NYSE:) as well as SocGen

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