SYDNEY: Share markets slipped on Monday in Asia as fresh fighting broke out between the United States and Iran, lifting oil prices, while bond yields stayed elevated after investors narrowed the odds on a US rate hike. Brent futures climbed 1.4% to $89.38 a barrel after US forces struck two of Iran’s launchers on its island of Larak on Sunday. In response, Iran was attacking US forces stationed in Jordan, Fox News said. The resulting risk to inflation kept bond markets on edge after Federal Reserve Chair Kevin Warsh emphasised on Friday the central bank had work to do to control inflation. Markets reacted by lifting the probability of a September rate increase to 57%, shoving short-term Treasury yields sharply higher and flattening the curve. “We continue to expect that a hike won’t come until December, though agree that the September meeting is live,” said Michael Feroli, chief US economist at JPMorgan. “Moreover, regardless of the exact timing of hikes, Warsh’s speech suggested a chair more willing to translate his concern about inflation into a policy tightening.” Key to the chance of an early hike will be the outcome of Friday’s August payrolls report and consumer price
SYDNEY: Share markets slipped on Monday in Asia as fresh fighting broke out between the United States and Iran, lifting oil prices, while bond yields stayed elevated after investors narrowed the odds on a US rate hike. Brent futures climbed 1.4% to $89.38 a barrel after US forces struck two of Iran’s launchers on its island of Larak on Sunday. In response, Iran was attacking US forces stationed in Jordan, Fox News said. The resulting risk to inflation kept bond markets on edge after Federal Reserve Chair Kevin Warsh emphasised on Friday the central bank had work to do to control inflation. Markets reacted by lifting the probability of a September rate increase to 57%, shoving short-term Treasury yields sharply higher and flattening the curve. “We continue to expect that a hike won’t come until December, though agree that the September meeting is live,” said Michael Feroli, chief US economist at JPMorgan. “Moreover, regardless of the exact timing of hikes, Warsh’s speech suggested a chair more willing to translate his concern about inflation into a policy tightening.” Key to the chance of an early hike will be the outcome of Friday’s August payrolls report and consumer price
