NEWSLETTER
Thursday / September 29Sep 29
Wednesday / June 15
Fed rate expectations
Investors and banks around the world have dramatically raised their bets that the US Federal Reserve will raise interest rates by 75 basis points (bps) rather than 50 bps on Wednesday, a swing in expectations which has fuelled a violent selloff across world markets.
Expectations for a 75-bps hike at the June meeting jumped to 89% on Tuesday from only 3.9% a week ago, according to CME's Fedwatch Tool. Consequently, expectations of a 50-bps rate hike on Wednesday have melted to 11% from a surefire bet a week earlier. Traders are currently pricing in a more than 90% chance of a 75-basis point hike, up from 3.9% a week ago, according to CME's FedWatch Tool.
Views that a 75-basis point hike was on the table have been growing after Friday's higher-than-expected consumer price index (CPI) data for May. In addition, a report from the Wall Street Journal on Monday and forecasts from several banks, including JP Morgan and Goldman Sachs, signaling a 75-basis point hike have bolstered that belief.
Scottish independence
Scottish First Minister Nicola Sturgeon on Tuesday said she was nearly ready to give more details on how the nation's devolved parliament could move ahead with a new independence referendum without the consent of the British government.
British Prime Minister Boris Johnson and his Conservative Party which is in opposition in Scotland, strongly oppose a referendum, saying the issue was settled in 2014 when Scots voted against independence by 55% to 45%.
But pro-independence parties won a majority in the Scottish parliament in an election held last year, which Sturgeon said gave her an "indisputable democratic mandate" to push ahead with plans for a second referendum.
Sturgeon, leader of the pro-independence Scottish National Party (SNP), is aiming to hold a vote by the end of 2023 even though British Prime Minister Boris Johnson has refused to issue a "Section 30" order to allow one.
"I do plan to give a significant update to parliament very soon indeed. Scotland under Westminster control is being held back. With independence, we too would have the levers and the autonomy that these countries take for granted to help fulfil their potential," she said.
US stocks
Stocks fell on Tuesday as the S&P 500 dipped further into bear market territory and rates surged as investors braced for further rate hikes from the Federal Reserve.
The Dow Jones Industrial Average fell 151.91 points, or 0.5%, to 30,364.83, the S&P 500 lost 14.15 points, or 0.38%, to 3,735.48. the Nasdaq Composite added 19.12 points, or 0.18%, to 10,828.35.
US two-year yields , which are highly sensitive to rate expectations, spiked to 3.439%, the highest since November 2007. US 10-year yields touched 3.479%, its strongest level since April 2011.
The yield curve between two-year and 10-year notes briefly inverted on Tuesday as far as 5.4 basis points, which typically suggests an incoming recession. The curve was last steeper at 4.2 bps.
Biden's Arabia visit
US president Joe Biden will meet Saudi Crown Prince Mohammed bin Salman and leaders from almost a dozen countries on a trip to the Middle East next month, Saudi Arabia and senior administration officials have said.
Biden will make stops in Israel, the occupied West Bank and Saudi Arabia during the July 13 to 16 visit, where he will focus on regional and energy security and expanding Israel’s integration in the region, among other issues, said White House press secretary Karine Jean-Pierre. The president will meet Israeli and Palestinian leaders and repeat his support for a two-state solution to the Israeli Palestinian conflict.
During his visit to Saudi Arabia on July 16 and 17, Biden will “explore co-operation between the two friendly countries and discuss ways to confront challenges facing the region and world,” the official Saudi news agency said.
In Jeddah, Biden will meet the heads of state of the six-member Gulf Cooperation Council — Saudi Arabia, the United Arab Emirates, Oman, Kuwait, Qatar and Bahrain — along with the leaders of Egypt, Iraq and Jordan.
Investors and banks around the world have dramatically raised their bets that the US Federal Reserve will raise interest rates by 75 basis points (bps) rather than 50 bps on Wednesday, a swing in expectations which has fuelled a violent selloff across world markets.
Expectations for a 75-bps hike at the June meeting jumped to 89% on Tuesday from only 3.9% a week ago, according to CME's Fedwatch Tool. Consequently, expectations of a 50-bps rate hike on Wednesday have melted to 11% from a surefire bet a week earlier. Traders are currently pricing in a more than 90% chance of a 75-basis point hike, up from 3.9% a week ago, according to CME's FedWatch Tool.
Views that a 75-basis point hike was on the table have been growing after Friday's higher-than-expected consumer price index (CPI) data for May. In addition, a report from the Wall Street Journal on Monday and forecasts from several banks, including JP Morgan and Goldman Sachs, signaling a 75-basis point hike have bolstered that belief.
Scottish independence
Scottish First Minister Nicola Sturgeon on Tuesday said she was nearly ready to give more details on how the nation's devolved parliament could move ahead with a new independence referendum without the consent of the British government.
British Prime Minister Boris Johnson and his Conservative Party which is in opposition in Scotland, strongly oppose a referendum, saying the issue was settled in 2014 when Scots voted against independence by 55% to 45%.
But pro-independence parties won a majority in the Scottish parliament in an election held last year, which Sturgeon said gave her an "indisputable democratic mandate" to push ahead with plans for a second referendum.
Sturgeon, leader of the pro-independence Scottish National Party (SNP), is aiming to hold a vote by the end of 2023 even though British Prime Minister Boris Johnson has refused to issue a "Section 30" order to allow one.
"I do plan to give a significant update to parliament very soon indeed. Scotland under Westminster control is being held back. With independence, we too would have the levers and the autonomy that these countries take for granted to help fulfil their potential," she said.
US stocks
Stocks fell on Tuesday as the S&P 500 dipped further into bear market territory and rates surged as investors braced for further rate hikes from the Federal Reserve.
The Dow Jones Industrial Average fell 151.91 points, or 0.5%, to 30,364.83, the S&P 500 lost 14.15 points, or 0.38%, to 3,735.48. the Nasdaq Composite added 19.12 points, or 0.18%, to 10,828.35.
US two-year yields , which are highly sensitive to rate expectations, spiked to 3.439%, the highest since November 2007. US 10-year yields touched 3.479%, its strongest level since April 2011.
The yield curve between two-year and 10-year notes briefly inverted on Tuesday as far as 5.4 basis points, which typically suggests an incoming recession. The curve was last steeper at 4.2 bps.
Biden's Arabia visit
US president Joe Biden will meet Saudi Crown Prince Mohammed bin Salman and leaders from almost a dozen countries on a trip to the Middle East next month, Saudi Arabia and senior administration officials have said.
Biden will make stops in Israel, the occupied West Bank and Saudi Arabia during the July 13 to 16 visit, where he will focus on regional and energy security and expanding Israel’s integration in the region, among other issues, said White House press secretary Karine Jean-Pierre. The president will meet Israeli and Palestinian leaders and repeat his support for a two-state solution to the Israeli Palestinian conflict.
During his visit to Saudi Arabia on July 16 and 17, Biden will “explore co-operation between the two friendly countries and discuss ways to confront challenges facing the region and world,” the official Saudi news agency said.
In Jeddah, Biden will meet the heads of state of the six-member Gulf Cooperation Council — Saudi Arabia, the United Arab Emirates, Oman, Kuwait, Qatar and Bahrain — along with the leaders of Egypt, Iraq and Jordan.
