WORLDWIDE: HEADLINES 

New Zealand Central Bank To Carry On With 50Bps Hike In August: Reuters Poll 

The Reserve Bank of New Zealand (RBNZ) will stick to its hawkish stance and deliver a fourth straight half-point rate hike on Wednesday in its most aggressive tightening in over two decades to try to rein in stubbornly-high inflation, a Reuters poll found. 

One of the first to withdraw pandemic-era stimulus among its peers, the RBNZ’s rate-hiking campaign to curb the highest inflation in three decades, at 7.3%, has already pushed rates up by 225 basis points since October. 

With inflation not expected to ease anytime soon and the labour market remaining tight, the RBNZ is likely to stay focused on containing price pressures while trying not to tip the economy into a recession. 

All 23 economists in the Aug. 8-11 Reuters poll forecast rate setters at the RBNZ would hike its official cash rate by another 50 basis points at its Aug. 17 meeting, taking it to 3.00%. It was 1.00% before the COVID-19 pandemic. 

Full coverage: REUTERS 

Thailand’s Tourism-Reliant Economy Likely Gathered Pace In Q2 

Thailand’s economy likely grew at its fastest pace in a year last quarter, thanks to increased tourism as pandemic curbs eased, but the high cost of living and a slowdown in China pose threats to the outlook, a Reuters poll showed. 

Growth in the tourism-dependent economy is estimated at 3.1% year-on-year in the second quarter, according to the median forecast of 16 economists polled between Aug. 8 and 11, up from 2.2% growth in the previous quarter. 

However, on a quarterly basis, gross domestic product (GDP) grew a seasonally-adjusted 0.9%, slowing slightly from 1.1% in the preceding quarter, the median forecast from a smaller sample of 12 economists showed. 

Forecasts ranged from 0.1% to 1.3%, highlighting uncertainties surrounding the recovery of Southeast Asia’s second-largest economy from the pandemic. The data are due to be released on Aug. 15. 

Full coverage: REUTERS 

WORLDWIDE: HEADLINES 

Asian Stocks Mixed And European Futures Flat On Rate Hike Worries 

Asian stocks were mixed and the yen fell on Friday, capping off a back-and-forth week that saw investors split on how aggressively the Federal Reserve would raise interest rates to tackle inflation. 

MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS)gained 0.1%, and Australia’s AXJO (.AXJO) was down 0.72%. 

Hong Kong’s Hang Seng index (.HSI) rose 0.35%, but Chinese blue-chip stocks (.CSI300) fell 0.1%. 

Japan’s Nikkei (.N225) was the major outlier, surging 2.43% to its highest level since January as markets reopened following a national holiday. 

Full coverage: REUTERS 

Japan’s Yen Bears Brunt Of Market Rethink On Fed 

The Japanese yen fell the most against a resurgent U.S. dollar on Friday, as a two-day rally in equities conceded to market expectations that the Fed will have to do a lot more to contain inflation. 

That realisation followed speeches and statements from a bunch of Federal Reserve officials warning investors against being sanguine after this week’s slight softening in inflation numbers. 

The latest was San Francisco Fed President Mary Daly, who said on Thursday that a 50 basis point interest rate hike in September “makes sense” given recent economic data including on inflation, but that she is open to a bigger rate hike if data warrants. 

The Nasdaq (.IXIC) and S&P 500 (.SPX) retreated on Thursday, despite fresh evidence of cooling inflation. 

Full coverage: REUTERS  

Oil Prices On Track For Weekly Gain As Recession Fears Ease 

Oil prices dipped in early trade on Friday amid uncertainty on the demand outlook based on contrasting views from OPEC and the International Energy Agency (IEA), but benchmark contracts were headed for weekly gains as recession fears eased. 

Brent crude futures fell 34 cents, or 0.3%, to $99.26 a barrel at 0112 GMT, while U.S. West Texas Intermediate (WTI) crude futures fell 34 cents, or 0.3%, to $94.00 a barrel. 

Brent was on track to climb more than 4% for the week, recouping part of last week’s 14% tumble, its biggest weekly decline since April 2020 amid fears that rising inflation and interest rate hikes will hit economic growth and fuel demand. 

WTI was heading for a weekly gain of more than 5%, recouping about half of the previous week’s loss. 

“There’s a great deal of uncertainty about demand in the short run. Until that settles, it (the market) will be like this for a while,” said Justin Smirk, a senior economist at Westpac. 

Full coverage: REUTERS