Oil tops $105 as bond yields climb
Brent crude has breached $105 and WTI has crossed $100 amid escalating tanker attacks and Houthi gains in Yemen, driving US gasoline prices higher and pushing Fed rate hike expectations to over 70%. This energy shock is weighing on equities, with the S&P 500 on track for a fourth consecutive loss as traders price in tighter supply and inflationary pressures confirmed by latest PPI data.
GN auto markets/indices: stock index reports that August Producer Price Index data came in line with expectations at +0.4% month-over-month, confirming ongoing inflationary pressures. This data, alongside the Houthi seizure of a key Red Sea port, has pushed the probability of a Fed rate hike to 73.4%, with two-year Treasury yields settling above 4.55% and ten-year yields approaching 4.95%.
Source: GN auto markets/indices: stock indexAl Jazeera English reports that Brent crude has surged 30% from its August lows, with WTI topping $100 for the first time since May as Houthi forces seized control of Yemen’s Mocha port. The outlet notes that Fed rate hike odds have climbed to 70% despite presidential lobbying for cuts, driven by rising US gasoline averages near $4.28 and renewed Iranian threats to escalate attacks on shipping.
Source: Al Jazeera EnglishPer GN auto markets/bonds: interest rates, markets are now pricing in a near-70% probability of a Federal Reserve rate hike next week, up from 61% the previous day, as soaring crude costs intensify inflationary pressures despite political lobbying for lower rates.
Source: GN auto markets/bonds: interest ratesBrent crude breached $105 per barrel, triggering a sharp rise in US Treasury yields and a broad decline in major stock indexes.
Source: GN auto markets/bonds: bond yields
