Bonds/Interest Rates

Oil hit US$142.99 on Friday before settling at US$140.21. The Dow lost 106.

GaveKal’s risk appetite indicator has turned down once more, indicating liquidity is being withdrawn by investors. This should encourage downward pressure on inflation by itself.

Broker downgrades hit Wall Street last night before OPEC called oil to US$170 on a weak US dollar. Oil hit US$140. The Dow fell 358.

As the Fed becomes more hawkish, is there a risk that runaway inflation forces central banks across the globe to suddenly start hiking aggressively?

The Fed left the cash rate unchanged, as expected, while suggesting a more hawkish bias. An unchanged Dow belied a 0.6% rise in the broad market and a 1.4% gain in the Nasdaq.

It is taking some time to achieve, but Westpac believes the RBA’s tightening policy will achieve the desired slowdown.

It was another choppy night on Wall Street ahead of tonight’s Fed rate decision. The Dow lost 34 points.

Standard Chartered argues the Varanus gas explosion could knock a full percentage point off Australia’s second half GDP.

The Dow closed unchanged last night, but it wasn’t all about a quiet market. A strong energy sector was offset by ever more weakness in financials. Gold took a dive.

Consensus at a gathering of hedge fund managers is that the credit crunch will continue and probably get worse.