A look at the day ahead in U.S. and global markets from Mike DolanWorld markets will hang on the words of Federal Reserve Chair Jerome Powell later on Tuesday but with the alarming sound of rising Sino-U.S. political tensions ringing in the ear.Powell's semi-annual testimony to the Senate Banking Commi
World markets will hang on the words of Federal Reserve Chair Jerome Powell later on Tuesday but with the alarming sound of rising Sino-U.S. political tensions ringing in the ear.
Markets have scrambled to push up their bets on the likely peak Fed policy rate over recent weeks as U.S. jobs, retail and inflation soundings have run hotter than most expected. That implied 'terminal rate' remained just shy of 5.5 per cent just ahead of Powell's set piece, even though two-year Treasury yields backed off recent 15-year highs and 10-year yields held well below 4 per cent.
And that level of policy uncertainty comes against sharply falling annual oil prices due to the base effects that compare with the Ukraine invasion period last year. Brent crude is down 30 per cent year on year, its biggest annual decline since late 2020. China's foreign minister turned up the heat on Tuesday by saying the United States should change its"distorted" attitude towards China or"conflict and confrontation" will follow.
The Australian dollar fell to its lowest level of the year so far on Tuesday after the Reserve Bank of Australia raised its policy interest rate to the highest in more than a decade but suggested it might be nearly done tightening.
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