霍尔木兹谈判僵局，油价承压回落

ABEER: THIS IS "HORIZONS MIDDLE EAST & AFRICA." OUR TOP STORIES. HORMUZ DEADLOCK. OIL INCHES LOWER AFTER A SUCCESSION RALLY. TRADERS WAIT FOR SIGNS OF PROGRESS AS WASHINGTON AND TEHRAN HARD IN THEIR POSITIONS. ASIAN STOCKS RISE AS A SUBDUED U.S. INFLATION REPORT EASES FEARS OF AN IMMINENT FED RATE HIKE. SOUTH KOREA'S KOSPI IS ENTERING A TECHNICAL BULL MARKET ON A REBOUND IN THE AI TRADE. YEN UNDER PRESSURE AS THE CURRENCY APPROACHES THE KEY 160 LEVEL AGAINST THE U.S.

DOLLAR. TRADERS BRACE FOR A POSSIBLE INTERVENTION FROM TOKYO AND WASHINGTON. IT'S JUST GONE 8:00 A.M. ACROSS THE EMIRATES. A QUICK LOOK AT WHERE RISK ASSETS ARE SITTING THIS MORNING IN DUBAI. WE ARE LOOKING AT U.S. FUTURES FLAT THIS MORNING. THE S&P DID CLOSE .3% HIGHER. NASDAQ 100 .7% HIGHER. WE LOOK AT THE AIR TRADE AND IT SEEMS TO BE EASING FROM SOME OF THE SELLOFF THAT WE HAD SEEN IN RECENT WEEKS. INDIVIDUAL NAMES IN THE UNITED STATES KEEP UP AN INTERESTING STORY.

ONE NAME THAT WAS DROPPING IN THE AFTERMARKET IS CISCO. THAT IS DESPITE THE FACT THAT THERE WAS AN EARNINGS BEAT, IT JUST FAILED TO LIVE UP TO ANALYST EXPECTATIONS AND THE MARKET. FELL 70% AFTER REPORTING A DECLINE IN HARDWARE REVENUE. AND THEN ASIAN EQUITIES 1% HIGHER. THE KOSPI AND SOUTH KOREA MORE THAN 4% HIGHER, ABOUT TO ENTER OR SET TO ENTER A TECHNICAL BULL MARKET. WE HAVE WINNIE IN A SECOND TO TALK TO US ABOUT WHAT IS HAPPENING.

BRENT CRUDE PRICES EASING, .5% LOWER, SNAPPING THAT SIX-DAY RALLY OVER THE ESCALATIONS IN THE MIDDLE EAST. THAT IS A BIG STORY WE WILL COVER MOMENTARILY. AND THEN THE YIELD ON THE 10 YEAR NOTES IN THE UNITED STATES IS SOMETHING WE ARE MONITORING CLOSELY. TWO BASIS POINTS LOWER THIS MORNING AFTER THAT SUBDUED INFLATION REPORT, 0.2% IN JULY THEY INCREASE IN U.S. CONSUMER PRICES. THAT IS IN JULY COMPARED TO JUNE. IN LINE WITH ESTIMATES.

MARKETS ARE SIGNING LESS THAN A 50% CHANCE OF A SEPTEMBER FED RATE HIKE. THERE YOU HAVE IT, A SUBDUED CPI REPORT THAT IS LEADING TO A DECLINE IN THE YIELD IN THE TO YOUR NOTES AND ALSO THE 10 YEAR NOTES. FOR A LOOK AT WHAT IS HAPPENING IN ASIAN MARKETS THIS MORNING, WE HAVE WINNIE HSU STANDING FOR US IN HONG KONG. WHAT DO YOU HAVE FOR US? WINNIE: A VERY POSITIVE SESSION IN ASIA TODAY WITH THE MSCI ASIA UP 1%. TAKING IT TO ITS HIGHEST LEVEL IN MORE THAN A MONTH.

AS YOU MENTIONED, ITS INVESTORS SHARING THE SOFTER U.S. CPI NUMBERS, AND OIL EASING A BIT OF THOSE GAINS. WE DID SEE THOSE ARE LIFTING THE TECH SHARES IN OUR REGION, ESPECIALLY WITH KOSPI UP MORE THAN 4%, ALONG WITH SOME OF THE TECH HEAVY GAUGES. WE LOOK AT THIS VERY INTERESTING CHART. I WANT TO SHOW YOU THIS TREND, OR EVEN A REVERSAL OF TRENDS. BASICALLY WE ARE SEEING THE KOSPI AFTER THAT SHARP CORRECTION RECENTLY IS UP 23% SINCE ITS JULY LOW.

ON THE OTHER HAND OF THINGS, YOU ARE SEEING THE HANG SENG INDEX TO HONG KONG SHARES AFTER THAT RECENT REBOUND SEEING THOSE MOMENTUM EASING, ESPECIALLY AS INVESTORS CONTINUE TO DIGEST THE LATEST EARNINGS FROM TENCENT THAT CAME OUT YESTERDAY EVENING. WE DID SEE TENCENT SHARES SLIDE EARLIER THIS MORNING, AND THAT IS COMING AFTER INVESTORS LOOKING AT THE DATA AND FOCUSING ON HOW THE COMPANY IS DOUBLING THE SPENDING IN AI, AND SEEING THE FREE CASH FLOW TURNING NEGATIVE.

RAISING MORE CONCERNS AND QUESTIONS ABOUT HOW PROFITABLE THE BUSINESS REALLY IS WHEN IT COMES TO AI MONETIZATION. ABEER: WINNIE HSU IN HONG KONG WITH THE LATEST ON THOSE GAUGES. BACK TO THE INFLATION STORY FROM THE UNITED STATES. U.S. INFLATION CAME IN SOFTER THAN EXPECTED IN JULY, OFFERING SOME RELIEF TO CONSUMERS AND EASING PRESSURE ON THE FEDERAL RESERVE TO RAISE INTEREST RATES. BUT PERSISTENT PRICE PRESSURES AND UNCERTAINTY AROUND OIL MARKETS CONTINUE TO COMPLICATE THE OUTLOOK, LEAVING TRADERS FOCUSED ON INCOMING DATA FOR CLUES ON THE FED'S NEXT MOVE.

TODAY'S CPI PRINT PUTS THE BAR FOR A FED HIKE MUCH HIGHER THAN THE BAR FOR A HOLD.

I DON'T THINK THIS RESOLVES A LOT. OUR LEAN IS STILL THE FED REMAINS ON HOLD IN SEPTEMBER.

THE SURFACE SECTOR -- SERVICE SECTOR BOUNCED BACK A BIT.

YOU CANNOT GET A PRICE WAGE SPIRAL GOING IF THE WAGES WILL REACT -- WON'T REACT. ABEER: WE ARE JOINED BY BLOOMBERG MLIV STRATEGIST DAVID SAVAGE. GOOD TO HAVE YOU WITH US. THE DATA THAT CAME OUT YESTERDAY SOFTER THAN A LOT HAD EXPECTED, WAS IN LINE WITH ESTIMATES. THE CPI NUMBERS THAT CAME OUT YESTERDAY, DID THEY GIVE THE FEDERAL RESERVE MORE ROOM TO STAY ON HOLD IN SEPTEMBER? DAVID: GOOD MORNING. THAT IS WHAT THE MARKET HAS BEEN TELLING US.

MARKET PRICING DIALED BACK SOME OF THOSE FED HIKE EXPECTATIONS, AND CERTAINLY FOR SEPTEMBER. WHAT IS OF INTEREST IS THE LONG END OF THE U.S. TREASURY CURVE HAS CONTINUED TO UNDERPERFORM, AND WE HAVE SEEN A STEEPENING OF THE CURVE. WHAT YOU HAD IS OSCILLATING FED EXPECTATIONS HOLD DOWN SHORT END YIELDS, BUT VERY RESILIENT U.S. ECONOMIC GROWTH, AND STILL NOW HIGHER COMMODITY PRICES AND SOME FISCAL SUSTAINABILITY CONCERNS START TO PUSH UP THE LONG END OF THE CURVE.

I THINK THIS ONE PRINT ISN'T GOING TO CHANGE THAT. I THINK ALREADY MARKETS ARE STARTING TO LOOK FORWARD, AND WHAT WILL IMPACT WHERE COMMODITY PRICES ARE NOW AND WHERE U.S. GROWTH IS, WHAT DOES THAT DO FOR RATES MOVING FORWARD. ABEER: MOVING ON TO THE BIG FX STORY, THE YEN. IT IS NOW AT 159.44 AGAINST THE U.S. DOLLAR, EDGING CLOSE TO THAT KEY LEVEL OF 160 PER DOLLAR. HOW LIKELY ARE JAPANESE AUTHORITIES TO INTERVENE AGAIN?

DAVID: I THINK THE BIGGER QUESTION IS WHERE DOES THE BOJ GO? WE HAVE SEEN INTERVENTIONS CERTAINLY CAN CAUSE SOME KNEE-JERK REACTION IN DOLLAR-YEN, BUT THE DOOR WAS OPEN FOR THE BOJ TO FOLLOW WITH MORE HAWKISH POSTURE. THAT OPPORTUNITY WAS MISSED. NOW WE SEE DOLLAR-YEN CREEP BACK TO 159. INTERESTINGLY WE HAVE SEEN EXPECTATIONS FOR A HIKE FROM THE BOJ IN SEPTEMBER STRUCTURE CREEP UP. STARTING IN AUGUST IT WAS AROUND 20%, NOW UP TO 75%.

GIVEN HOW PERSISTENTLY WEAK THE YEN HAS BEEN, REALLY I THINK WE WILL SEE SIGNALS FROM THE BOJ THAT MULTIPLE HIKES MIGHT BE ON THE TABLE BEFORE WE START TO SEE PERSISTENT STRENGTH COME BACK, BECAUSE OTHERWISE YOU SEE CARRIE TRADERS COME BACK -- CARRY TRADERS COME BACK IN AND GRIND DOLLAR-YEN HIGHER. ABEER: SO A RETURN TO FUNDAMENTALS MAY BE ESSENTIAL. THANK YOU AS ALWAYS FOR YOUR TIME, BLOOMBERG MLIV STRATEGIST DAVID SAVAGE.

WE RETURN TO THE GEOPOLITICAL STORY IN THE REGION. OIL IS TAKING A BREATHER AFTER A SIX SESSION GAIN WITH FUTURES EDGING LOWER AS TRADERS WAITED FOR SIGNS OF PROGRESS OF REOPENING THE STRAIT OF HORMUZ. PRESIDENT DONALD TRUMP SAYS HE THINKS THE UNITED STATES WILL KEEP TOTAL CONTROL OF THE WATERWAY, BETTING ONCE AGAIN THAT SUFFOCATING ECONOMIC PRESSURE WILL DO THE JOB. MEANWHILE, PAKISTAN'S DEFENSE MINISTER HAS SAID BOTH SIDES ARE "CLOSE TO SOME SORT OF ARRANGEMENT OVER THE STRAIT OF HORMUZ."

TO DISCUSS ALL OF THIS, WE ARE NOW JOINED BY OWNER AND BLOOMBERG'S MANAGING EDITOR FOR THE MIDDLE EAST AND NORTH AFRICA JOINING US FROM ISTANBUL. THE LATEST. WE SEE THE BACK CONTINUE INTO THE SECOND WEEK ABOUT THE DEAL AND STRAIGHTER PERFORMANCE AND WIDER IMPLICATIONS PRESIDENT TRUMP HAS TOUTED. WHERE DOES THIS BACK AND FORTH LEAVE US IN TERMS OF THE WIDER NEGOTIATIONS? ONUR: I THINK LOOKING AT THE OIL MARKETS, IT GIVES US A CLEAR IDEA WHERE WE STAND.

EVEN THOUGH THERE WAS A PULLBACK, WE SEE OIL TRADING NEAR $88 A BARREL, MORE THAN 10% FOR SIX CONSECUTIVE SESSIONS. THE BROADER PICTURE HAS NOT CHANGED. THE TALKS BETWEEN THE U.S. AND IRAN OVER THE REOPENING OF THE STRAIGHTER FROM THOSE REMAIN ESSENTIALLY DEADLOCKED WITH IRAN DIGGING IN ON ITS POSITION THAT THE U.S. MUST MEET ITS DEMANDS TO REOPEN THE STRAIT. THOSE DEMANDS ARE SIGNIFICANT, INCLUDING LIFTING THOSE SANCTIONS AND ENDING THE WAR ACROSS THE MIDDLE EAST, INCLUDING GAZA AND LEBANON.

THERE IS ANOTHER DIPLOMATIC TRACK WORTH WATCHING, THE TALKS BETWEEN IRAN AND OMAN. THE KEY STICKING POINT IS IRAN IS SEEKING TO COLLECT TOLLS FROM SHIPS THAT MAY BE ABLE TO TRANSIT THE STRAIT OF HORMUZ ONCE THE WATERWAY REOPENS. WE GOT ANOTHER INDICATION OF THAT A FEW HOURS AGO WHEN THE IRANIAN FOREIGN MINISTRY SPOKES