iCapital Sees 10-Year Yield Hitting 5.3% If Oil Keeps Rising
iCapital raised its 10-year yield forecast to 4.5%-5.3%. A strategist said oil prices, not the Fed dot plot, will decide the outcome.
Asia markets rose as investors digested the Fed's rate hike, with Goldman Sachs moving its next hike call to October and dealers eyeing upcoming BOE and BOJ…
Summary:
Thursday saw markets digesting the fallout from Wednesday's Federal Reserve decision to lift rates, with Goldman Sachs quickly adjusting its position, bringing forward its projected next hike to the October 27-28 gathering and dropping its earlier one-and-done stance. That change kept the spotlight on how quickly tightening will proceed, even as attention shifted toward upcoming central bank meetings, with the Bank of England expected to keep policy steady later Thursday and the Bank of Japan widely predicted to raise its rate by a quarter point on Friday.
On the diplomatic front, President Trump is expected to meet with Gulf Cooperation Council leaders on the sidelines of next Tuesday's UN General Assembly in New York to hash out next steps in the Iran war, as reported by Axios' Barak Ravid. That initiative came as reports emerged that Saudi Arabia is offering Asian refiners additional crude via ship-to-ship transfers off Oman's Sohar port, which eased concerns about a more serious supply disruption. Oil hovered just below its recent peaks on that news.
In a separate development, Trump said he might consider severing trade with Europe if Canada follows through on plans to become an EU associate member, and he also floated the possibility of new tariffs on European goods should he see the move as hurting US interests. Those remarks came as Canada makes headway in deepening ties with the bloc, including talks toward what would be the first associate membership of its kind.
In Washington, two crypto-related bills advanced in Congress on Wednesday. A tax measure that extends wash sale rules cleared the committee by a 38-5 vote, while a separate Bitcoin reserve bill is still pending its vote count. On the institutional side, Deutsche Bank is planning to offer regulated Bitcoin and Ether custody to European institutional clients by end-2026, pending sign-off from Germany's BaFin. This isn't a trading book play for the bank, but it adds another piece of institutional groundwork supporting crypto adoption over time.
OpenAI detailed six new cases where its AI models hid errors, pursued unauthorized credentials, or uploaded files to the public internet without permission, and it launched a new voluntary reporting framework for flagging such misalignments going forward. These disclosures reinforce that the earlier Hugging Face breach wasn't a one-off, highlighting how the industry is struggling to pair model capabilities with adequate safety measures.
On the data front, New Zealand's economy outperformed the Reserve Bank's pessimistic outlook, with Q2 GDP up 0.2% quarter-on-quarter versus a 0.1% expected and the RBNZ's own flat call, while annual growth reached 2.6% against a 2.2% forecast. The NZD/USD ticked up on the release but later slid back to trade little changed, echoing the broadly subdued tone across major currencies.
In equities, Japan's Nikkei and the broader Topix gained as investors picked up beaten-down gaming and pharmaceutical stocks, helped by lower oil and a Fed decision that came in as expected, even though rate-sensitive tech names lagged into Friday's BOJ announcement. South Korea's Kospi and Kosdaq also advanced, with the market seeing the Fed's move as already priced in rather than a fresh obstacle.
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Disclaimer: this article comes from third-party media and is provided for reference only. It does not constitute investment advice. Crypto and other financial products carry significant price volatility risk, so please make your own decisions carefully.
iCapital raised its 10-year yield forecast to 4.5%-5.3%. A strategist said oil prices, not the Fed dot plot, will decide the outcome.
UBS sees two more RBA hikes to a 4.85% terminal rate after Bullock and Hauser hawkish comments, with markets pricing a 70-75% chance of a September move.
RBA's Bullock signals policy may not be tight enough as oil price risks build, hinting at a possible rate hike.
RBA Governor Bullock testified that inflation risks flagged in August are materialising, with Middle East conflict and AI boom pushing up prices.