Oil prices,on Tuesday,October 17, clung to this month’s high after Iraqi forces seized the oil-rich city of Kirkuk from largely autonomous Kurdish fighters while Asian shares held firm on optimism about upcoming earnings.
U.S. crude CLc1 traded at $51.78 a barrel, down slightly on the day, after having hit a high of $52.37 on Monday, a rise of 6.7 percent from its three-week low of $49.10 hit on Oct 6.
Brent crude LCOc1 fetched $57.84 per barrel, flat on the day after having risen to as high as $58.47 on Monday.
U.S. short-term interest rates and bond yields jumped on Monday after Trump met Stanford University economist John Taylor to discuss the job of Federal Reserve Chair as Trump seeks candidates to succeed current Janet Yellen next year.
The policy-sensitive two-year yield jumped to as high as 1.546 percent US2YT=RR, its highest since 2008, while Fed funds rates futures contract for settlement in late 2018 to early 2019 posted one of their biggest falls so far this year.
Trump has met other candidates, including former Fed Governor Kevin Warsh, current Governor Jerome Powell and he will see Yellen on Thursday, leaving markets on tenterhooks.
“At the moment, there’s no consensus at all in the market and there is little point betting on who will be picked as it would be a complete gamble. But once the decision is made, there will be a clearer market direction,” said Tomoaki Shishido, fixed income analyst at Nomura Securities.
“And when the uncertainty is cleared, bond yields are likely to rise given the strength of the economy now,” he added.
