MARKET UPDATE

Euro Edges Lower Against Dollar Ahead of Key Fed Decision

The euro edged lower against the dollar on Monday, as investors weighed the potential size of an expected Federal Reserve interest rate rise later this week.

On Wednesday, the U.S. central bank is widely expected to hike by at least 75 basis points with inflation remaining elevated. The FOMC statement and accompanying press conference by Fed Chair Jerome Powell will also be studied carefully as the market tries to gauge the possibility this aggressive tightening will plunge the world’s largest economy and major global growth driver into recession.

 

Global gasoline cracks collapse, blow to refiners’ profits

A sudden crash in global gasoline prices in the past two weeks has dented refiners’ profits, pushing up inventories in key trading hubs around the world while looming exports from China and India also add to pressure on growing stockpiles.

Refiners will be forced to cut gasoline output to safeguard themselves against losses and switch to producing more profitable fuels, traders say, but summer demand is also being hurt by high pump prices in the United States and Europe, and by instability and easing seasonal demand in some parts of Asia.

 

Oil extends losing streak on fears Fed hike will dampen fuel demand

Oil prices dropped on Monday, extending a recent losing streak on concerns that an expected rise in U.S. interest rates would weaken fuel demand.

“Oil prices have been under pressure due to growing worries that aggressive rate rises by the U.S. Federal Reserve will slow the global economy and reduce fuel demand,” said Tetsu Emori, chief executive of Emori Fund Management Inc.

 

Italy preparing stimulus package worth up to $13.3 billion – Treasury official

Italy is preparing a new stimulus decree worth up to 13 billion euros ($13.3 billion) to help families and firms deal with a surge in electricity, gas and petrol costs, deputy Economy Minister Laura Castelli said on Monday.

The new scheme, which comes on top of some 33 billion euros already budgeted since January, is expected to be one of the last major acts by Prime Minister Mario Draghi, who last week resigned paving the way for a snap national election on Sept. 25.

Among the measures being studied, the government could make essential consumer staples such as pasta and bread temporarily exempt from VAT sales tax, Castelli told broadcaster Radio 24.

Other measures include subsidising energy supplies for low-income families and energy-intensive enterprises, the deputy minister added.

 

 

 

 

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