Japan’s Nikkei rises 2% in mixed Asia session after Wall Street’s rebound rally

Australia’s central bank sees an argument for slower interest rate increases

Reserve Bank of Australia Governor Philip Lowe said the central bank “recognizes” that “the case for a slower rise in interest rates is getting stronger as the level of the cash rate rises.”

National Australia Bank economist Tapas Stickland said Lowe’s comments could “signal a downshift to 25bp intervals at some point.”

“Given the lag in the operation of monetary policy and the rapid rise in interest rates over the past four months, this could be soon, and a pause is also likely at some point,”[ads1]; he said of Lowe’s comments.

– Jihye Lee

Nio says Nvidia chip restrictions won’t hurt them

Nio said U.S. restrictions on Nvidia chip sales to China will not affect the automaker’s business.

“We believe this will have no impact on our business operations,” Nio founder, chairman and CEO William Li said, according to a StreetAccount transcript of the company’s translation during an earnings call on Wednesday.

“Based on our estimates, our computing power is sufficient for our autonomous driving technology development in the aspect of AI training for now,” Li said.

Read the whole story here.

-Evelyn Cheng

Oil prices rise after Russian threat to stop energy exports

Oil prices rose, after losses in the previous session, following Russian President Vladimir Putin’s threat to stop oil and gas exports if European nations introduce price caps on Russian oil.

Brent crude futures rose 1% to $88.88 a barrel, while US West Texas Intermediate rose 1.1% to $82.83 a barrel.

“The easing in global oil prices was driven by concerns over slower growth in China following the August trade data,” according to a Mizuho note.

– Lee Ying Shan

Freight rates peaked earlier than expected as global trade slows, S&P says

Shipping rates for containers and dry bulkers – or vessels that carry raw materials and bulk goods – have fallen over the past three months, S&P said, adding that rates peaked earlier than expected in the second quarter.

S&P’s Freight Rate Forecast models have also predicted the Baltic Dry Index – a barometer of the cost of moving key commodities by sea – is expected to fall around 20% to 30% for the year before recovering slightly in 2024.

This underscores the growing risk of a global recession as consumer demand retreats amid rising living costs and inflation.

Read the whole story here.

—Su-Lin Tan

Australia posts record decline in trade surplus; iron ore and coal exports fall

Australia had a record drop in its trade surplus, mainly due to falling exports of iron ore and coal.

Exports in July fell 10% from the previous month, while imports rose 5%, resulting in a narrowed trade surplus of A$8.7 billion in July from A$17.1 billion the previous month.

Capital Economics said the falling trade surplus was “well below the analyst consensus of $14.5 billion and even the bottom of the consensus forecast of $10.5 billion”.

“The recent fall in iron ore prices has not yet fully passed through to iron ore exports. In fact, with the RBA’s August commodity price index 20% below its peak in May, it is clear that the trade surplus has peaked,” Capital Det senior economist Marcel Thieliant said in economics.

—Su-Lin Tan

Apple’s Asia suppliers rise after iPhone 14 announcements

US dollar has legs to move even higher, Wells Fargo strategist says

The US dollar has room to move higher thanks to interest rate differentials on the back of a hawkish Federal Reserve, according to Wells Fargo Securities FX strategist Brendan McKenna.

“We think many of these international banks will not be able to raise interest rates as aggressively as the markets have priced in,” he told CNBC’s “Squawk Box Asia.”

“So it’s kind of a combination of a more hawkish Fed and a less hawkish tightening cycle from these international central banks supporting the dollar for the rest of this year,” he said.

– Jihye Lee

Huawei launches first smartphone to connect China’s rival to GPS

Huawei took the wraps off the Mate 50 smartphone, its latest attempt to stay relevant in the mobile market, even as it has lost a lot of ground due to US sanctions.

Huawei claims this is the first smartphone released to the public that can connect to China’s Beidou satellite network, a rival to the US state-owned Global Positioning System (GPS) which was completed in 2020.

US sanctions against the company over the past three years have cut the company off from key components and software and crushed its smartphone business.

Read the whole story here.

-Arjun Kharpal

Goldman Sachs raises the Fed’s forecasts for hikes for this year

Goldman Sachs revised its forecasts for upcoming interest rate decisions from the Federal Reserve.

Analysts led by chief economist Jan Hatzius said in a note that the firm expects a rise of 75 basis points in September, up from a previous forecast of 50 basis points, as well as a rise of 50 basis points in November, also revised from a previous estimate of 25 basis points.

It also expects a 25 basis point hike in December – citing officials’ recent hawkish commentary.

The note said Fed officials “have appeared to suggest that progress toward taming inflation has not been as steady or as rapid as they would like,” the note said.

– Jihye Lee

Japan’s economy grew annually by 3.5%, according to estimates

Japan’s economy grew 3.5% year-on-year in the second quarter, beating estimates from a Reuters poll that had predicted growth of 2.9%.

The economy grew 0.9 percent from quarter to quarter, official data show.

Spending growth will continue to be positive in Japan, according to Darren Tay, economist at Capital Economics Japan.

“Consumers have a large pot of pandemic-forced savings that they can rely on,” Tay said on CNBC’s “Squawk Box Asia,” adding that investors are betting on further widening of interest rate differentials between the Federal Reserve and a dovish Bank of Japan.

– Jihye Lee, Charmaine Jacob

CNBC Pro: The Wall Street pro predicts when the S&P 500 will rally — and reveals how to trade it

Market volatility is here to stay, according to market veteran Phil Blancato.

But the president and CEO of Ladenburg Thalmann Asset Management sees a “strong rally” on the cards as market conditions improve.

He predicts when the rally will take place and lists his top picks for trading the volatility.

Pro subscribers can read more here.

— Zavier Ong

All major averages edge higher, Nasdaq snaps 7-day losing streak

Stocks rose on Wednesday as Wall Street looked past concerns about aggressive rate hikes by the Federal Reserve.

The Dow Jones Industrial Average rose 435.98 points, or 1.40%, to end the day at 31,581.28. The S&P 500 rose 1.83% to 3,979.90 and the Nasdaq Composite rose 2.14% to 11,791.90, snapping a seven-day losing streak.

—Carmen Reinicke

Brainard says Fed is ‘in this as long as it takes’

Federal Reserve Deputy Chairman Lael Brainard vowed Wednesday to continue the central bank’s run against inflation, saying rising prices were hurting lower-income households.

“We’re in this as long as it takes to get inflation down,” Brainard said in prepared remarks for a speech in New York. “So far, we have quickly raised the policy rate to the peak of the previous cycle, and the policy rate needs to be increased further.”

Brainard said there were some examples of prices coming down at retail, but that there “may also be some room for reduction” in profit margins for car companies in particular.

— Jesse Pound, Jeff Cox

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