Traders see 90% chance of another 75-basis-point Fed hike in September: FedWatch
The probability of the U.S. Federal Reserve hiking interest rates by another 75 basis points at its September meeting moved to 90%, according to the CME Group’s FedWatch tracker of fed funds futures bets.
That’s up from last week’s 82% probability for a three-quarter point hike.
The chance for a 50-basis-point hike now stands at 10%, FedWatch showed.
–Jihye Lee
North Asian refiners to be supplied full allocation of Saudi crude in October, Reuters reports
At least three North Asian refiners have been notified by Saudi Aramco that they will be supplied full contractual volumes of crude in October, Reuters reported, citing people with knowledge of the matter.
In their first reduction in four months, Saudi Arabia has reduced the official selling prices to Asian buyers for the month.
Brent crude futures sank 1.50% to $91.45 per barrel, while U.S. West Texas Intermediate dropped 1.60% to $85.40 per barrel.
— Lee Ying Shan
Japan travel stocks jump on reports of dropping group travel rule
U.S. to broaden curbs on chip and tool exports to China, Reuters reports
The U.S. Department of Commerce plans to publish new regulations related to restricting exports of chipmaking equipment to Chinese factories that produce advanced semiconductors, Reuters reported, citing people familiar with the matter.
The rules will be based on letters sent to KLA, Lam Research and Applied Materials earlier this year, when they were informed that government-issued licenses would be needed to sell such equipment to buyers that make chips with sub-14 nanometer processes.
The new regulations would likely include additional actions against China, sources told Reuters, adding they could be changed and published later than expected.
—Jihye Lee
Economic consultancy downgrades growth forecasts for New Zealand
Economists at the New Zealand Institute for Economic Research downgraded the growth outlook for the country, citing continued high inflation and interest rates.
They now expect the annual gross domestic product for 2022-2023 to grow 2.5%, lower than its previous forecast of 2.9%.
GDP for 2023-2024 is now expected to grow 1%, a steep downgrade from its earlier prediction of a 1.9% increase published in June, while the 2024-2025 forecast was revised to 1.5% from 2.1%.
—Jihye Lee
CNBC Pro: Sterling has been tanking versus the dollar. Here’s how low it could go, according to the pros
Yen intervention likely won’t be effective: National Australia Bank
A unilateral intervention on the Japanese yen from the government is unlikely to be effective, according to National Australia Bank — after officials over the weekend said the government needs to take steps to address the excessive declines in the yen.
“If the [Bank of Japan] really wants to stop JPY’s decline, then they need to make changes to their ultra-easy policy, the pressure is building,” he wrote in a Monday note. a currency strategist at National Australia Bank
The yen last traded at 142.55 against the dollar.
—Abigail Ng
CNBC Pro: Goldman reveals the ‘sweet spot’ for its favorite oil stocks — and gives one 35% upside
Oil prices fall on prospects of weakening demand
Oil futures dropped on demand concerns due to extended Covid measures in parts of China, alongside the potential of continued interest rate hikes globally.
“Oil consumption is particularly sensitive to Covid lockdowns since transportation, the major use of oil, is heavily restricted,” Commonwealth Bank of Australia analyst Vivek Dhar wrote in a note, adding China accounted for up to 16% of global oil demand last year.
— Lee Ying Shan
