China announced additional measures easing COVID-19 restrictions after new data showed a sharp slowdown in the country’s trade in November. Apple’s iPhone production was one of the victims of this trend. Central banks in Brazil and Poland are expected to pause interest rate hikes, but Canada is set to tighten policy further. And Xi Jinping will visit Saudi Arabia on a day when oil prices erase their gains for the year over fears of a looming recession. Here’s what you need to know about the financial market on Wednesday, Dec. 7.

1. China moves further away from ‘zero tolerance’ policy after alarming trade slump

Trade data from China will shed light on why Beijing is suddenly so eager to relax its “zero tolerance” COVID-19 strategy.

Chinese exports fell 8.7% year-on-year in November, the biggest drop since the worst days of the pandemic in March 2020, while imports fell by an even more significant 10.6%. Both figures were markedly weaker than analysts’ forecasts. The figures have been largely affected by the break in the new wave of COVID-19, as well as a sharp fall in global demand, which is also evident in indicators such as shipping rates, which are now 50% below their peaks.

On Wednesday, the central government in Beijing unveiled another 10-point plan to ease restrictions, affecting the ability of local officials to arbitrarily quarantine businesses and residential neighborhoods, as well as further relaxing screening requirements for entry to public places.

2. Canada is set to raise rates by 50 basis points, but other countries may have already peaked; U.S. productivity data in focus

While the U.S. market is wary of raising the ultimate federal funds rate, central banks in other countries are beginning to take their “foot off the brake.”

Brazil and Poland, which began tightening monetary policy ahead of the US Federal Reserve, are expected to keep their key interest rates at 13.75% and 6.75%, respectively. The Reserve Bank of Australia raised its rate by a modest 25 basis points on Tuesday.

In contrast, developed market banks are still in tightening mode. The Bank of Canada is expected to continue raising its rate, increasing it by 50 basis points to 4.25%.

In the US, later quarterly data on unit labor costs and productivity may attract more interest than usual after the November labor market report highlighted the extent of supply problems in the labor market.

3- The US stock market will open slightly lower

U.S. stock indices will open slightly lower, trying to stabilize after a second consecutive day of heavy losses amid concerns that the Federal Reserve may trigger a recession with a rate hike of more than 5% next year.

By 06:30 ET (11:30 GMT), the Dow Jones futures were down 44 points, or 0.1%, the S&P 500 futures were down 0.2% and the Nasdaq 100 futures were down 0.3%. The three major money indexes lost between 1% and 2% on Tuesday.

The stocks likely to be in focus are Sanofi (NASDAQ:SNY) and GlaxoSmithKline (NYSE:GSK), after a federal judge in the U.S. overturned a closely watched trial that claimed their heartburn drug Zantac causes cancer. In response, GSK shares jumped more than 12% on the premarket in London. Also in focus will be Meta Platforms* (NASDAQ:META), whose shares fell nearly 7% on Tuesday following reports that the EU will restrict its ability to run targeted ads on its social media platforms.

4. Apple is fighting on two fronts

A major factor in the decline in Chinese exports was the disruption of a major factory complex at Foxconn (TW:2354), Apple’s (NASDAQ:AAPL) iPhone supplier in Zhengzhou last week.

Norio Nakajima, president of key Apple supplier Murata Manufacturing, told Bloomberg on Wednesday that he expects further downward revisions to orders, with the main risk coming from U.S. consumers.

Apple shares came under further pressure when Bloomberg reported that the company had pushed back the tentative launch date for its electric car by a year to 2026, concluding that current technology would not allow for fully autonomous driving.

There was more positive news for the company as its main chip supplier, Taiwan Semiconductor Manufacturing (NYSE:TSM), said it would triple its planned investment in the state of Arizona, which could ultimately reduce Apple’s reliance on chips made in China and Taiwan.

5. Oil lost 2022 gains on recession fears amid Xi’s arrival in Riyadh

Crude oil prices lost their gains for the year in response to China’s trade data, which heightened fears that the U.S. will lead the world into recession next year. That’s despite a relatively strong performance

The day before, WTI futures fell to $73.81 a barrel and Brent futures hit $79.03 a barrel before recovering slightly in European trading.

Chinese leader Xi Jinping is due in Riyadh on Wednesday for talks with Saudi Arabia and other Gulf states that could affect OPEC’s production plans. In the U.S., meanwhile, government data on crude oil inventories is expected to show another large decline of 3.3 million barrels last week, although that’s a significant drop from the previous week’s decline of 12.6 million barrels.