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Below are Views On Daily Global Market Update 23 November 2021 By Asheesh Chanda, Kristal.AI

Powell stays at the helm

Biden opted for the continuation option by appointing Powell to a second four year term as Fed Chair yesterday. Brainard will take the vice-chair position responsible for overseeing bank regulation - vacated by Quarles ahead of schedule. The move is seen as placating both Reps and Dems as Brainard is expected to be tougher on bank regulation but ultimately Powell will remain in charge. Both confirmations are pending Congress but a rejection of either is unlikely. Powell's next term will commence in Feb 2022.

Markets perceived this as a hawkish shift, with SPX selling off into the close after grinding higher all day. Gains were led by Energy and Financials with 56% of the constituents closing in the green. The yield curve bear flattened again as the front end lurched higher - 2Y almost at 60 bps now and 10Y at 1.62%. Inflation breakevens fell on the day though and HY spreads compressed too, indicating a small change in the risk off sentiment that was prevalent last week.

China continued to step up the diplomatic pressure on Taiwan, now targeting corporates it perceives as supporting the independence cause. China's recent military achievement on the hyperglide missile launcher (at 5x the speed of sound) has also left everyone wondering how they pulled it off. On real estate debt, onshore banks are reportedly being encouraged to lend to distressed names in the sector and Kaisa will reportedly pay off its wealth management product obligations this quarter. Equity indices on the mainland were among the highest gainers on the day.

Ahead today, we have Q4 GDP data from Germany and PMI data from Europe. Sentiment is expected to have taken a hit here with the recent spike in Covid cases and the restrictions that followed. Merkel said the current wave was more intense than the prior ones and the ECB has chosen to take heart from the fact that the impact on lives and livelihood is diminishing with each passing wave.”

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