Lackluster GDP throws wrench into Fed’s rate-hike plans
First quarter GDP, to be released on Thursday, is expected to slump to a paltry 0.7% annual rate from a 1.4% rate in the last three months of 2015, according to economists surveyed by MarketWatch.
The Fed will want to be reassured that the economy is going to pick up before raising rates again, he said.
Jacob Oubina, senior U.S. economist at RBC Capital Markets, said the so-called Brexit referendum will keep the Fed on the sidelines in June.
1MDB Confirms It Defaulted on $1.75 Billion Bond Issue
Troubled Malaysian state investment fund 1Malaysia Development Bhd. confirmed Tuesday that it defaulted on a $1.75 billion bond issue.
Interest of $50 million on that bond was due Monday.
Malaysia’s ringgit slipped 0.7% against the U.S. dollar Tuesday after 1MDB said it defaulted on the interest payment. In recent months, traders have been little-concerned by the saga, expecting it to blow over and for a default to be avoided.
IMF urges GCC to adapt to lower oil prices
The International Monetary Fund forecast on Monday economic growth in the six-nation Gulf Cooperation Council will be 1.8 per cent this year, down from 3.3 per cent in 2015, and urged spending cutbacks.
In an interview, IMF regional chief Masood Ahmed also said the oil-exporting Gulf states should press forwards with diversifying their revenue base faced with persistent low crude prices.
Decades-Old Oil Reliance May Stymie Saudi Prince’s ‘Vision’
Saudi Arabia’s plan for the post-hydrocarbon era will have to overcome habits developed over decades of relying on crude sales to fuel economic growth, create jobs and build infrastructure.
Almost eight decades after oil was first found in the country, officials on Monday are to unveil Deputy Crown Prince Mohammed bin Salman’s “Saudi Vision 2030,” a blueprint seeking to reduce the reliance on revenue from crude exports. King Salman approved the package of developmental, economic, social and other programs. Prince Mohammed, known as MbS among diplomats and Saudi watchers, disclosed details of the plan in interviews with Bloomberg in Riyadh.
Oil prices dip on looming production race between Saudi Arabia, Iran
Crude oil futures dipped on Tuesday as analysts warned of an intensifying producer race between Saudi Arabia and Iran, wiping out earlier price gains that came from a weaker dollar and a flood of new cash into the market.
Front-month Brent crude futures LCOc1 were trading at $44.37 per barrel at 0639 GMT, down 11 cents from their last settlement. U.S. crude futures CLc1 were down 12 cents at $42.52 per barrel.
The dips erased earlier gains on Tuesday from a weaker dollar .DXY and by a rush of new investment into crude futures.
"The biggest bear risk to the oil market right now is that Iran's ramp-up accelerates and then that Saudi Arabia does the same," Citi said in a note to clients.
BMI Research said that it had upgraded its Saudi Arabian crude production forecast, "reflecting the failure of the meeting at Doha, planned increases in output capacity and the creeping politicization of oil under Deputy Crown Prince Mohammad bin Salman."
Reference: MarketWatch, Wall Street Journal, Oman Observer, Bloomberg, Reuters
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