XM Australia Expects 50-Basis-Point Fed Rate Cut, Sees Oil Prices Rising

XM Australia expects the US Federal Open Market Committee to cut the benchmark federal fund rate by 50 basis points at its two-day policy meeting, Chief Executive Officer Peter McGuire said. However, some market analysts are still vouching for a 25-bp rate cut by the US rate-setting panel to put an end to its aggressive rate hike cycle which began in March 2022.

The dollar index, which is struggling to come back from the over one-year low it hit late August, may extend losses, according to McGuire. The dollar index was trading 0.08% lower at 100.82 as of 08:48 a.m.

McGuire also said a small section of the financial markets is expecting the US Federal Reserve to go more aggressive, to loosen the monetary condition in the country.

Risk assets, such as emerging financial instruments, may see dip in case the quantum of rate cuts is less than what the market participants are expecting, McGuire told NDTV profit.

He expects crude oil prices to rise as the northern hemisphere is stepping towards winter season. He also noted energy prices in retail markets remained chunky, and have seen levels well above their highs.

Brent crude was trading 0.43% lower at $73.38 a barrel as of 09:00 a.m.

Copper prices may oscillate for a moment. However, prices are going to be rangebound. Global demand is going to peak up for finished goods. This could be the turn of the season, as far as the US rate is dropping. The next year is going to be a little bit more global growth, he said.