- Morning Bid: China rates eyed, oil hits new high

China is expected to maintain its benchmark lending rates unchanged on Wednesday, which will attract attention in Asian markets as the rising oil prices continue to impact investor sentiment worldwide. Other important events on the regional calendar include the release of trade data from Japan, export orders from Taiwan, producer price inflation figures from South Korea, and New Zealand’s second-quarter current account balance. However, the main event of the day is the Federal Reserve’s policy meeting, where they will announce their interest rate decision and unveil new forecasts. Chair Jerome Powell will also hold a press conference. It is highly likely that the Fed will keep rates on hold, with futures markets indicating a 30% chance of a rate hike in November or a 40% chance in December. The current momentum in oil prices and bond yields may influence the Fed’s decision to raise rates again this year. Oil prices are steadily increasing, approaching $100 a barrel, while U.S. bond yields remain high. This has led to a decline in stocks and risk assets, with world stocks falling for three consecutive days. Asian markets will not be able to react to the Fed’s decision until Thursday, so their direction on Wednesday will depend on local events. China’s central bank is expected to maintain rates due to signs of economic stabilization and a weakening yuan. In terms of geopolitics, attention will shift to the United Nations General Assembly in New York, where headlines from official meetings and bilateral discussions between world leaders are expected. Key developments that could impact markets on Wednesday include China’s interest rate decision, Japan’s trade data for August, and the United Nations General Assembly.