Hold on, what about us?
Don’t hold your breath for a rate cut here.
Here’s a solid explainer from Gareth Hutchens from just last week.
Market economists roundly expected the RBA to keep rates on hold the last time the board met. They did.
Most don’t expect any shift in 2024.
Conflict could see oil prices spike
The toll of conflict in the Middle East, or anywhere, is borne by the people living there and those connected to them.
The grim, escalating situation is the latest development in what has been a downpour of sadness in the troubled region.
Economically, the global impact is also potentially huge.
Here’s Mark Ryan of Reuters with an examination of the potential hit to fuel prices. (All figures in $USD).
“For context, Brent crude futures are currently around $75 a barrel, well below their $84 level at the time of Hamas’ Oct. 7 strike on Israel nearly a year ago and far off the $130 highs reached after Russia’s invasion of Ukraine in February 2022.
“Europe would be exposed to rising oil prices because, unlike the United States, it has no major domestic oil production. But even there, policymakers estimate a durable 10% rise in prices would be needed to push up inflation by just 0.1 percentage point.
“The economic impacts of an all-out war that led to wider attacks on energy infrastructure throughout the Middle East and Gulf regions plus further disruptions to trade routes through the Red Sea, would be more tangible.
“Oxford Economics estimated such a scenario would spike oil prices up to $130 and knock 0.4 percentage points off global output growth next year, which the International Monetary Fund currently sees at around 3.3%.”
Three words. Huge impact.
One short phrase from the most powerful man in the world has boosted crude oil prices, with the suggestion of a widening Middle East conflict.
Asked if he would support Israel firing missiles to strike Iran’s oil facilities, US President Joe Biden said the US was discussing the possibility.
“We’re discussing that.”
The price of crude oil, the product then refined into petrol and other products, jumped more than +5% overnight.
Iran is the seventh largest oil producer in the world. It sends more than half of its production abroad, mainly to China.
Since Iran’s missile attack on Israel on Monday, the price of benchmark Brent crude oil has risen 10% to $77 a barrel, although this remains below levels seen earlier this year.
Market snapshot
ASX 200 futures: -0.3% to 8,215-points
Australian dollar: Flat at 68.41 US cents
Dow Jones: -0.4% to 42,011-points
S&P 500: -0.2% to 5,699-points
Nasdaq: -0.04% to 17,918-points
FTSE 100: -0.1% to 8,282-points
EuroStoxx 50: -0.9% to 4,921 points
Spot gold: -0.07% to $US2,655/ounce
Brent crude: +5.4% to $US77.89/barrel
Iron ore: $US109.29/tonne
Bitcoin: +0.3% to $US60,842
Prices current around 7:30am AEDT.
Live updates on the major ASX indices:
Welcome to the last morning of trading for the week
Good morning!
Daniel Ziffer from the ABC business unit.
The ASX 200 has hit record highs this week. Today is the last day of trading for the week, with the futures index tipped the flagship index will fall 27-points or -0.3% to 8,215-points.
We’ll see at 10am AEST.
Indices in Wall Street provide a weak lead, with the key Dow Jones index -0.4% to 42,011-points.
The broader S&P 500 index is -0.2% to 5,699-points and the tech-heavy Nasdaq is essentially stable, -0.04% to 17,918-points.
Plenty to get to, let’s get into it.
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