A customer shops at a supermarket in Oregon.
Wang Ying | Xinhua News Agency | Getty Images
This report is from today’s CNBC Daily Open, our international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.
What you need to know today
Japan intervention?
Japanese authorities could intervene if the yen falls to 155 against the dollar, according to “Mr Yen,” a former top foreign exchange official Eisuke Sakakibara. His remarks come a day after the Bank of Japan ended its negative interest rates policy, which triggered a sell-off in the currency. The yen may also strengthen to 130 by early next year, he said.
Tim Cook visits China
Apple CEO Tim Cook is on a visit to Shanghai amid falling iPhone sales in the country. The trip comes ahead of the inauguration of the latest Apple retail store in Shanghai on Thursday. China is a key market and manufacturing base for Apple which revealed plans to expand its research centers in Shanghai and Shenzhen earlier this month.
Kuwait oil CEO on energy demand
The CEO of Kuwait Petroleum Corporation said global energy demand will outstrip the rate of population growth through 2050. “That means that we’re going to require more energy intensity for the population in the world,” Shaikh Nawaf al-Sabah said at an energy conference, contradicting forecasts that demand will peak by 2030.
[PRO] UBS global stock picks
UBS revealed its high conviction global stock picks across Europe and Asia, giving one a 90% upside. It selected 32 buy recommendations “poised to captivate and elevate” investors’ portfolios for Europe. For Southeast Asia, the bank picked stocks such as petroleum producer PTTEP and conglomerate SM Investments.
The bottom line
The final leg of the inflation fight is proving to be difficult for the Fed.
A recent slate of worrying economic data has shown inflation’s stubborn staying power within the broader economy.
“The Fed’s inflation target is 2%, and the bottom line of the inflation discussion is that inflation has started to move sideways at 3%, and this is a problem for the Fed,” said Torsten Slok, chief economist at Apollo Global Management in a note.
The Federal Open Market Committee will likely use this week’s policy meeting to debate on whether inflation continues to cool or if progress has stalled.
While the central bank is widely expected to keep rates unchanged, investors will draw careful scrutiny for any clues about the timing of future rate cuts.
Half of respondents in a CNBC Fed survey indicated the biggest risk is that the Fed cuts too late, while 46% worry the central bank will cut too early.
Still, continued high inflation is judged to be the biggest risk to economic expansion.
Despite the latest run of hot inflation data, market watchers still expect the Fed to stick to three rate cuts.
“We are sticking with three this year, starting in June,” Joe Kalish, chief global macro strategist of Ned Davis Research, said in a note.
“But it would only take two participants to change their views to have the median fall to two cuts from three.”