Darren Sinden, Market Commentator for Admiral Markets, joined Nick Batsford and Zak Mir on the Tip TV Finance Show to discuss the negative effects of the assumed Federal Reserve interest rate hike on the global economy.
Key Points:
Sinden noted the expectation of 75% for a Fed rate hike of 25 bps, with US unemployment and core inflation making a good case for interest rates to rise.
Markets are skittish and volatile, and he urged this will remain the case until the dust settles, with Batsford highlighting the resurgence in the VIX.
Sinden continued that global debt denominated in USD stood at around $9.8 trillion, with EM exposure greater than $3 trillion, which he added has doubled since 2009.
He also outlined that the Yuan is being allowed to ease by the PBoC, and he believed this will have negative impacts on commodity exporters.
Sinden concluded that despite last minute concerns, the Fed are likely to hike interest rates, but are also likely to talk down a fixed timetable for hikes in the future.