Asia-Pacific markets mixed; oil pops on possible OPEC+ supply cut

A Reuters poll of economists expects the Reserve Bank of Australia to hike its benchmark interest rate by 50 basis points to 2.85%.

RBA’s board members said the case for a slower pace of rate hikes was growing, according to minutes from its Sept. 6 meeting, when it raised its interest rate by 50 basis points.

Analysts at Nomura are expecting the central bank to raise rates by 40 basis points, “to convey the view of RBA nearing the end of upsized hikes.”

Economists at Commonwealth Bank Australia see a higher chance for a 25-basis-point hike than a 50-basis-point hike.

–Jihye Lee

The British pound jumped on Monday morning on reports that the U.K. government will reverse plans to scrap the top rate of income tax.

Sterling gained 0.8% against the dollar to trade at around $1.1250 shortly after 7 a.m. London time, taking the pound back to the level seen before Finance Minister Kwasi Kwarteng’s announcement of a raft of widely criticized tax cuts on Sept. 23.

Ahead of an OPEC+ meeting on Oct. 5, ANZ sees a “significant chance of a cut” as large as 1 million barrels per day, analysts at the firm said in a note.

That move is likely to be made “to counteract the excessive bearishness in the market.”

The note added that any production cuts below 500,000 barrels per day, however, would be “shrugged off by the market.”

–Jihye Lee

Exchange-traded funds offer the benefit of diversification, says Jon Maier, chief investment officer at Global X ETFs. He said the ETF market is “growing exponentially” and estimates it to be worth $10 trillion.

He names several opportunities for ETF investors in this volatile market.

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— Zavier Ong

Sentiment of Japan’s large manufacturers worsened in the July-to-September quarter, according to the Bank of Japan’s latest quarterly tankan business sentiment survey.

The headline index for large manufacturers’ sentiment came in at 8, a decline from the previous quarter’s reading of 9. Economists polled by Reuters expected a print of 11.

“Our expectation and market expectations were for the manufacturing reading to pick up — supply conditions had improved, you’ve seen fading supply impact from zero-Covid policies in China, commodity prices came down a little bit,” said Stefan Angrick, a senior economist at Moody’s Analytics.

“The fact that the manufacturing side of the economy isn’t doing so well certainly isn’t great for the outlook,” he told CNBC’s “Squawk Box Asia.”

But the non-manufacturing index ticked up slightly, which could mean Japan’s late Covid recovery is getting underway, he added.

— Abigail Ng

New research from HSBC says supply chains, geopolitical tensions, and worsening…