Oil prices are up 5% as worries grow about when the Strait of Hormuz will reopen. The RBA is set to hold rates today. And Bank of Japan members grow more hawkish as inflation expectations grow.
In our deep-dive interview, ANZ Group Chief Economist Richard Yetsenga says there are some key similarities between 1990s Japan and China’s economy today.
5 things to know in 5 minutes:
Oil prices are up over 5% due to uncertainty of when the Strait of Hormuz will reopen. That saw US stocks fall slightly and Treasury yields rise. The moves come as traders position for tomorrow’s US CPI inflation data. ANZ Economist Bansi Madhavani says the market is focussed on whether higher oil prices are feeding into other parts of the economy.
The Reserve Bank of Australia has a rate decision today. ANZ Group Chief Economist Richard Yetenga is expecting a hold at 4.35%, along with the market.
Richard says markets will still be on the lookout for any indication there could be one more rate hike.
The Bank of Japan released its July meeting summary of opinions. ANZ Head of FX Research Mahjabeen Zaman said board members are more hawkish, seeing upside risk to prices. ANZ Research expects the BoJ to hike in October.
Mahjabeen says part of the upward pressure on prices had been coming from the weaker yen. The yen had weakened to dollar-yen of 164 before joint intervention with the US a little over a week ago saw it trading last week in a range of 157-158. However, it weakened again overnight past 159.
Cheers,
Alex.
PS: Catch you tomorrow with reaction to the RBA decision later today.
