The May overnight index swap contract rose to 5.11 per cent, more than 50 basis points above the current effective fed funds rate, Bloomberg reported. The market also priced in a higher so-called terminal rate, with the July contract rising to 5.31 per cent, reflecting a roughly 70 per cent chance of a third quarter-point hike in June.
On Wall Street, the S&P 500 Index is heading towards its second-straight weekly loss. Near 1.10pm, energy was pacing seven of the 11 S&P 500 industry sectors lower. Utilities was the best performer.
Federal Reserve Bank of Richmond president Thomas Barkin said he favours a quarter-point interest rate hike in February to give the central bank “flexibility” in it quest to tamp down inflation.
Fed Governor Michelle Bowman said the central bank should keep raising rates since inflation remains “much too high”.
Former Treasury Secretary Lawrence Summers said that a broadening in US price pressures shows that the Federal Reserve’s monetary tightening to date is having a limited impact, raising the danger of policymakers having to do more than previously envisioned.
“The Fed’s been trying to put the brakes on, and it doesn’t look like the brakes are getting much traction,” Summers told Bloomberg Television. “The risk is that we’re going to hit the brakes very, very hard.”
Other top stories
New SMSF accounts plunge as big super fights back The number of new self-managed super funds has fallen for the first time in four years as improved offerings from industry and retail funds take the shine off DIY super.
Chanticleer: CBA’s slide upends banks’ pecking order CommBank’s record half-year profits did not stop brokers downgrading its shares and warning of more pain to come. This presents an opportunity for investors.
Westpac customers may have to cut back on the ‘wagyu and shiraz’ CEO Peter King has warned almost half the bank’s mortgage customers will have to make higher repayments than those the bank assumed when it assessed their capacity to repay low-rate loans.
ATO pursues 50,000 fraudsters in online-based GST scam worth billions The promoters of the fraudulent scheme use social media platforms including TikTok, Instagram and Facebook to recruit participants.
Market highlights
ASX futures down 9 points or 0.12 per cent to 7265 near 5am AEDT
- AUD -0.2% to 68.66 US cents
- Bitcoin -2.4% to $US24.323 at 5.50am AEDT
- On Wall St near 1pm: Dow -0.2% S&P -0.9% Nasdaq -1.4%
- In New York: BHP -1% Rio -0.8% Atlassian -3.8%
- Tesla -0.7% Apple -1.6% Amazon -2.3%
- In Europe: Stoxx 50 -0.5% FTSE -0.1% CAC -0.3% DAX -0.3%
- Spot gold +0.3 to $US1841.69/oz at 1.02pm in New York
- Brent crude -3.1% to $US82.47 a barrel
- Iron ore +0.9% to $US125.70 a tonne
- 10-year yield: US 3.84% Australia 3.81% Germany 2.34%
- US prices as of 1.04pm in New York
United States
SpaceX is facing a $US175,000 fine from the US Federal Aviation Administration for failing to provide proper advance data about an August 2022 Starlink launch and its potential for collision with debris in orbit.
Deere & Co raised its earnings guidance above analyst estimates as sustained high crop prices keep farmers spending, resulting in a record windfall for the top maker of agricultural machinery.
Commodities
European natural gas futures settled below €50 a megawatt-hour for the first time in over 17 months as the region’s worst energy crisis in decades recedes — though there are signs further price declines are unlikely.
Futures have plunged by more than 80 per cent from their August peak when Russia’s gas cuts hit Europe with about $US1 trillion in energy costs, hammering the region’s economy and pushing inflation to the highest in decades.
