The ASX is expected to open steady despite a bloated session on Wall Street overnight.
Benchmark futures point to a practically flat open, with the ASX 200 poised to gain 3 points, or 0.04%, by the morning bell.
What’s new on Wall Street?
New York markets struggled to rise from the red as mounting COVID cases, hawkish Fed remarks and oil price cap talks put a dampner on gains.
All four major indices finished with losses, while the Russell 2000 led the pack by shedding just more than 2% of its value.
As China’s COVID situation continued to worsen, protestors are hitting back at the strict lockdown policies in major cities across the nation, sparking unease in global markets.
XM Research’s Raffi Boyadjian said risk assets took a knock at the start of the week as worries about instability in China led investors to search for safety.
“Anti-lockdown protests started spreading after a deadly fire in Xinjiang last Thursday where residents were reportedly unable to escape the residential complex due to the harsh COVID restrictions,” he explained.
“But the protests erupted further over the weekend, turning into nationwide demonstrations against the government’s handling of the pandemic as anger boiled over.
“It is yet unclear how authorities plan to quell the ever-growing unrest given their unprecedented scale, or just how much more widespread these protests will become.
“But this is uncharted territory for President Xi Jinping and the Communist Party, and it is making the markets nervous.”
Meanwhile, comments from two Fed officials indicate the central banking system has a tight grasp on its ‘higher for longer’ interest rate narrative.
New York Fed president John Williams said: "I do think we're going to need to keep restrictive policy in place for some time; I would expect that to continue through at least next year.”
And Cleveland Fed President Loretta Mester commented: “Given where we are in terms of inflation readings, the outlook and the risks, I still put more weight on a higher risk or a higher cost of not doing enough.
“The costs of stopping too early are high. We want to be very diligent about this.”
Commodities and currency
Commodities tumbled overnight as markets react to COVID protests in China.
Copper futures were down as much as 2% in London, while consumer staples like pork and wheat dropped 3% or more.
Oil delivered a mixed session — the price of WTI fell 2.13%, but Brent Crude jumped 1.26%.
Gold, however, is staging a slight reversal amid the volatility, up 0.48% to fetch US$1,753 an ounce.
The Aussie dollar also gave up some ground overnight as Covid news hit the currency market.
Our local currency shed 1.5% of its value to buy 66 US cents and 56 British pence.
On the ASX
Poseidon Nickel is in a trading halt as it readies to announce a capital raise.
The company is yet to declare how much it will raise or where the funding will go, but investors should know more when shares re-enter quotation by Thursday, December 1.
Energy giant Woodside is also in the headlines after releasing its 2023 capital expenditure and production forecasts.
The petroleum explorer and producer believes its CAPEX for the full year will range between US$6 billion and US$6.5 billion, while production guidance stands between 180 million and 190 million barrels of oil equivalent.