SYDNEY - Share markets got off to a cautious start on Monday as oil eased from six-month highs ahead of a week packed with central bank meetings and company earnings that will further test investor confidence in the AI boom, Reuters reported. Brent oil slipped 1.6% to $114.88 a barrel in the updated trade, following reports that Qatari mediators were in Tehran on Sunday as part of an effort to de-escalate regional tensions in coordination with the United States. US crude futures fell 1.9% to $101.29 a barrel.
Source: Reuters, Oct 26, by Wayne Cole, via WTBX
Brent futures jumped 6.2% last week to their highest weekly close since mid-2022 as Houthi attacks in Saudi Arabia stoked concerns about energy supplies, Reuters reported. Yaani - oil is still near its highest in about four years on a weekly closing basis, even after Monday's slip. MSCI's broadest index of Asia-Pacific shares outside Japan eased 0.1%. Chinese blue chips lost 1.0% as China's ruling Communist Party began its fifth plenum in Beijing; the market has now fallen for 11 weeks straight amid concerns about domestic demand, even as exports remain strong, Reuters said.
Source: Reuters, Oct 26, via WTBX
Central banks meet through the week
The inflationary pulse from oil is likely to alarm all the central banks meeting this week, with hikes seen as just a matter of time even if some hold for now, Reuters reported. "The main message from global central banks grappling with this year's macroeconomic surprises is that a relatively shallow rate hike cycle is underway," said Bruce Kasman, global head of economics at JPMorgan, quoted by Reuters. "G3 central banks are likely to remain on hold, but Canada should start its tightening cycle and first moves are expected from the UK and Sweden next month."
Source: Reuters, Oct 26 - Bruce Kasman, JPMorgan
New Zealand's central bank is widely expected to raise rates on Wednesday. Markets assume the US Federal Reserve will stand pat, but imply an 80% chance it will pull the trigger in December - much the same is priced in for the Bank of Japan and the European Central Bank, Reuters reported. A key reading on US core inflation should show cost pressures remained elevated at 3.1% in September, while the economy is forecast to have grown at a brisk 3.2% annualised pace thanks in part to furious spending on data centres, Reuters added in its earlier Monday snapshot.