Economy

Gazprom’s statement came a day after it said it would not resume gas supply to Germany via Nord Stream 1 until an oil leak it said it had detected in a turbine was fixed. It said the repairs could only be carried out at a specially fitted workshop.The Kremlin has blamed Western sanctions for disrupting Nord Stream 1 and putting barriers in the way of routine maintenance work. Western officials have rejected this claim and Siemens Energy said sanctions do not prohibit maintenance.Before the latest round of maintenance, Gazprom had already cut flows to just 20% of the pipeline’s capacity. “Siemens is taking part in repair work in accordance with the current contract, is detecting malfunctions … and is ready to fix the oil leaks. Only there is nowhere to do the repair,” Gazprom said in a statement on its Telegram channel on Saturday.Siemens Energy said it had not been commissioned to carry out the work but was available, adding that the Gazprom reported leak did not normally affect the operation of a turbine and could be sealed on site. “Irrespective of this, we have already pointed out several times that there are enough additional turbines available in the Portovaya compressor station for Nord Stream 1 to operate,” a spokesperson for the company said.Flows through Nord Stream 1 were due to resume early on Saturday morning. But hours before it was set to start pumping gas, Gazprom published a photo on Friday of what it said was an oil leak on a piece of Nord Stream 1 equipment.Siemens Energy, which supplies and maintains equipment at Nord Stream 1’s Portovaya compressor station said on Friday the leak did not constitute a technical reason to stop gas flows.Europe has accused Russia of using gas supplies as a weapon in what Moscow has called an “economic war” with the West over the fallout from Russia’s invasion of Ukraine.Asked about the halt on Saturday, Economic Commissioner Paolo Gentiloni said the European Union expects Russia to respect energy contracts it has agreed but was prepared to meet the challenge if Moscow fails to do so.German network regulator said the country’s gas supply was currently guaranteed but the situation was tense and further deterioration could not be ruled out.”The defects alleged by the Russian side are not a technical reason for the halt of operations,” the Federal Network Agency said in its daily gas situation report. More

The discounts on cars and trucks that US dealerships traditionally offer over holiday weekends have vanished as tight supply has turbocharged pricing enough to help fuel inflation.Eric Frehsee, president of family-owned Tamaroff Jeffrey Automotive Group in suburban Detroit, remembers how as a teenager, Labor Day at the dealership meant balloons, barbecue and discounts designed to clear the lot before the next year’s models began arriving in October.But the business of selling cars has changed so much since the pandemic’s start that Frehsee, now 37, is closing the dealership for the weekend. If a customer wants to buy, the finance manager is watching his iPad.“We’d always have a three-day blitz, with additional incentives and rebates and special financing,” he said. But now, as manufacturers struggle to produce enough vehicles to feed consumer demand, “incentives have kind of gone away, so there’s no need for that blitz”.The price of a new vehicle has climbed steadily over the past two and a half years. The average transaction price reached a record-setting $48,182 in July, an increase of 24 per cent since March 2020, according to data from Kelley Blue Book, a brand owned by Cox Automotive.New and used vehicle prices have helped to drive inflation upward over the past year. The consumer price index in July rose 8.5 per cent over the previous 12 months. The price for new vehicles rose 10.4 per cent in July, while used cars and trucks climbed 6.6 per cent. Together the two categories contributed 0.7 percentage points to the overall increase.Price growth has been fuelled by what EY-Parthenon chief economist Gregory Daco called a “significant mismatch” between vehicle supply and demand. Consumer demand for new cars and trucks rebounded more quickly than carmakers expected after Covid-19 forced plants to suspend production for months. The supply of new vehicles tightened further last year when carmakers worldwide confronted a shortage of semiconductors, a key component in systems ranging from power steering to anti-lock brakes.Inventories at dealerships around the US sit at near-record lows. In July, dealers reported they had between 30 and 40 days of inventory on hand, according to Kelley Blue Book. Inventory has increased 27 per cent from a year earlier, when days’ supply dipped into the 20s.At Frehsee’s business, inventory has dipped from a 120-day supply three years ago, to 10. His lots used to have about 1,000 vehicles parked on them. Now it is fewer than 100, and cars and trucks are parked horizontally to make the lots appear fuller. Half the 200 vehicles he has arriving this month are already sold.While the current level of about 1.1mn new vehicles for sale is too lean for the industry, it is unlikely to ever rebound to pre-pandemic levels, when it was more than three times higher, said executive analyst Michelle Krebs at Cox Automotive.“Automakers and dealers have learned that demand outstripping supply means bigger profit margins and less discounting,” she said.Incentives in August decreased 51 per cent compared to a year ago, to an average of $877 per vehicle, Deutsche Bank analyst Emmanuel Rosner wrote in a note.

Tamaroff Jeffrey is selling most cars and trucks these days at the manufacturer’s suggested retail price, Frehsee said. The dealership has had record profits. But he worries that sales could decline if changing economic conditions make the vehicles less affordable. For now, many of his customers are trading-in leased vehicles with substantial equity, and those trade-in values work to keep their new vehicle payments in the range they are used to paying.“Rising gas prices, rising interest rates and the decrease of incentives are leading to much higher car payments, and with the economy being so volatile right now there are definitely concerns about people . . . being able to absorb all these increases,” he said.The median period a US consumer owns a vehicle is six years. JD Power analyst Tyson Jominy said that means there are still Americans who have not shopped for a car or truck since before the pandemic “and are completely unaware of the conditions at a dealership: All you basically see are asphalt or used cars.”But even if a recession looms on the horizon, he said, low inventory levels, high pricing and limited discounts mean the industry will be well prepared. The large, eye-catching props that car dealers have traditionally used to capture consumers attention will not be necessary.“Do not expect any great deals, do not expect the inflatable gorilla to be out there,” Jominy said. “It’s not the same sales environment this Labor Day.” More

JAKARTA (Reuters) – Indonesian President Joko Widodo on Saturday raised some fuel prices by around 30% to contain ballooning spending on energy subsidies in Southeast Asia’s biggest economy.The move risks sparking protests and further fanning price pressures, though analysts saw a need to act to ensure fiscal discipline.WHAT HAS BEEN DECIDED ON FUEL PRICES?Indonesia raised the price of its most popular 90-octane gasoline, known as Pertalite, to 10,000 rupiah ($0.6714) per litre, up from 7,650 rupiah. The finance ministry said state energy firm Pertamina’s production costs for this type of fuel was 14,450 rupiah per litre.The price of diesel rose to 6,800 rupiah per litre, from 5,150 rupiah, compared with a production cost of 13,950 rupiah.Jokowi, as the president is popularly known, also hiked the price of 92-octane gasoline, known as Pertamax, to 14,500 rupiah per litre, from 12,500 rupiah. Pertamina does not receive compensation for losses in Pertamax sales.WHY RAISE FUEL PRICES NOW?The government has already tripled its energy subsidy spending this year from the original budget to 502.4 trillion rupiah ($33.83 billion) to keep subsidised fuel prices and some power tariffs unchanged amid high global energy prices. This has resulted in a widening price disparity between subsidised and non-subsidised fuel, prompting consumers to switch to cheaper fuels.Some economists have said raising fuel prices this year would reduce the risk of spending overruns in 2023 when the government must lower its fiscal deficit to below 3% of GDP.WHY IS HIKING FUEL PRICES CONTROVERSIAL?Fuel prices are a politically sensitive issue in Indonesia and with subsidised fuels making up more than 80% of Pertamina’s sales, the changes will have major implications for households and small businesses. Big companies are not allowed to buy subsidised fuels for their operations.Previous price increases had led to mass protests across the archipelago, including when Jokowi last raised fuel prices in 2014.The current price hike comes at a time when food prices are already trending up. August inflation was 4.69%, above the central bank’s target range for three months in a row.The government has this week started to distribute cash from a $1.6 billion additional social protection fund to cushion price pressures for the poor.Elections are set to be held in 2024.HOW WILL THE MEASURES IMPACT INFLATION, GDP?Pertamina has estimated a 30% to 40% increase in fuel prices could add 1.9 percentage point to inflation in 2022, but this assumed a bigger increase in some prices.Some economists and business groups think inflation could pick up to around 6% by the end of the year, putting pressure on the central bank to tighten monetary policy more quickly.Bank Indonesia (BI) raised interest rates on Aug. 23 for the first time since 2018 in a move analysts said was to pave the way for the fuel price hike announcement. BI is still well behind most peers in its roll back of pandemic-era stimulus and economists expect more hikes. The potential reduction in purchasing power and higher interest rates could hurt economic growth. The government targets 2022 GDP growth at 5.2%.WHAT HAPPENS TO SUBSIDY BUDGET NOW?Finance Minister Sri Mulyani Indrawati said even with the fuel prices increase, the government’s energy subsidy spending would still swell.She estimated energy subsidy allocation this year will range between 591 trillion rupiah to 649 trillion rupiah after the price hike, assuming the Indonesia Crude Price moves between $85 to $100 per barrel for the remainder of the year.The government may shift about 100 trillion rupiah of subsidy payments to 2023, pending parliamentary approval, Sri Mulyani said.She did not give any assessment on how the price hike would affect the 2022 budget deficit outlook. Her latest forecast was for a fiscal gap equivalent to 3.92% of GDP.($1 = 14,895.0000 rupiah) More

Historian Niall Ferguson warned Friday that the world is sleepwalking into an era of political and economic upheaval akin to the 1970s — only worse.
Speaking to CNBC at the Ambrosetti Forum in Italy, Ferguson said that the catalyst required to spark a repeat of the 70s — namely inflation and international conflict — had already occurred.
“The ingredients of the 1970s are already in place,” Ferguson, Milbank Family Senior Fellow at the Hoover Institution, Stanford University, told CNBC’s Steve Sedgwick.

Historian Niall Ferguson warned Friday that the world is sleepwalking into an era of political and economic upheaval akin to the 1970s — only worse.
Speaking to CNBC at the Ambrosetti Forum in Italy, Ferguson said the catalyst events had already occurred to spark a repeat of the 70s, a period characterized by financial shocks, political clashes and civil unrest. Yet this time, the severity of those shocks was likely to be greater and more sustained.

“The ingredients of the 1970s are already in place,” Ferguson, Milbank Family Senior Fellow at the Hoover Institution, Stanford University, told CNBC’s Steve Sedgwick.
“The monetary and fiscal policy mistakes of last year, which set this inflation off, are very alike to the 60s,” he said, likening recent price hikes to the 1970’s doggedly high inflation.
“And, as in 1973, you get a war,” he continued, referring to the 1973 Arab-Israeli War — also known as the Yom Kippur War — between Israel and a coalition of Arab states led by Egypt and Syria.
As with Russia’s current war in Ukraine, the 1973 Arab-Israeli War led to international involvement from then-superpowers the Soviet Union and the U.S., sparking a wider energy crisis. Only that time, the conflict lasted just 20 days. Russia’s unprovoked invasion of Ukraine has now entered into its sixth month, suggesting that any repercussions for energy markets could be far worse.
“This war is lasting much longer than the 1973 war, so the energy shock it is causing is actually going to be more sustained,” said Ferguson.

2020s worse than the 1970s

Politicians and central bankers have been vying to mitigate the worst effects of the fallout, by raising interest rates to combat inflation and reducing reliance on Russian energy imports.
But Ferguson, who has authored 16 books, including his most recent “Doom: The Politics of Catastrophe,” said there was no evidence to suggest that current crises could be avoided.
“Why shouldn’t it be as bad as the 1970s?” he said. “I’m going to go out on a limb: Let’s consider the possibility that the 2020s could actually be worse than the 1970s.”

Top historian Niall Ferguson has said the world is on the cusp of a period of political and economic upheaval akin to the 1970s, only worse.
South China Morning Post | Getty Images

Among the reasons for that, he said, were currently lower productivity growth, higher debt levels and less favorable demographics now versus 50 years ago.
“At least in the 1970s you had detente between superpowers. I don’t see much detente between Washington and Beijing right now. In fact, I see the opposite,” he said, referring to recent clashes over Taiwan.

The fallacy of global crises

Humans like to believe that global shocks happen with some degree of order or predictability. But that, Ferguson said, is a fallacy.
In fact, rather than being evenly spread throughout history, like a bell curve, disasters tend to happen non-linearly and all at once, he said.
“The distributions in history really aren’t normal, particularly when it comes to things like wars and financial crises or, for that matter, pandemics,” said Ferguson.
“You start with a plague — or something we don’t see very often, a really large global pandemic — which kills millions of people and disrupts the economy in all kinds of ways. Then you hit it with a big monetary and fiscal policy shock. And then you add the geopolitical shock.”
That miscalculation leads humans to be overly optimistic and, ultimately, unprepared to handle major crises, he said.
“In their heads, the world is kind of a bunch of averages, and there aren’t likely to be really bad outcomes. This leads people … to be somewhat overoptimistic,” he said.
As an example, Ferguson said he surveyed attendees at Ambrosetti — a forum in Italy attended by political leaders and the business elite — and found low single-digit percentages expect to see a decline in investment in Italy over the coming months.
“This is a country that’s heading towards a recession,” he said.

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(Reuters) – Federal Reserve officials have acknowledged that the battle against inflation will be paid for with lost jobs, and the U.S. central bank will need an unlikely combination of events to keep those losses to a minimum as interest rates continue to rise. Economists assessing the trade-off facing the Fed estimate U.S. employment could drop by anywhere from a few hundred thousand positions to as many as several million before the Fed fixes the worst outbreak of inflation in 40 years.The final tally will depend on how closely the economy follows patterns seen in recent decades, to what extent things like improved global supply chains help lower inflation, and how strict the Fed is in enforcing its 2% inflation goal.With the central bank’s preferred inflation measure currently increasing at a more than a 6% annual rate, Joe Brusuelas, chief economist at RSM, a U.S.-based consulting firm, estimates it would take 5.3 million lost jobs and an unemployment rate of 6.7%, substantially above the 3.7% seen in August, to lower inflation to 2%.”Can the Fed achieve a pure soft landing? … Probably not,” Brusuelas said, referring to a scenario in which monetary tightening slows the economy, and inflation, without triggering a recession. “It is difficult to envision a benign outcome.” Data on August jobs, released Friday, gave the Fed a bit of a reprieve. U.S. firms added 315,000 jobs in August, a slowing from the blow-out half-million jobs added in July and a sign that some of the economy’s post-pandemic excesses may be moderating without giving way altogether.In addition, the number of people in the labor force surged by nearly 800,000 to a new record high – a dynamic Fed officials have been banking on to ease wage pressures over time. Because many of those new entrants had yet to find a job, the unemployment rate rose to 3.7% from 3.5%, an increase Fed and other officials are likely to see as constructive since it indicates a greater supply of people willing to take jobs if offered. “I don’t mind seeing an uptick in unemployment if we are getting more people into the work force. That is good for companies,” said U.S. Labor Secretary Marty Walsh. “We still hear the concerns” from firms about difficulties hiring workers, “but not as loud,” he said. Fed officials hope the burden of fighting inflation falls less on employment than other parts of the economy, even as for months they’ve bemoaned the labor market’s current state as unsustainable. The August jobs report did not ease all those concerns. Average hourly earnings continued to increase at a 5.2% year- over-year pace, the same as the month before.Fed officials feel that needs to slow, with Cleveland Fed President Loretta Mester saying this week she felt wage growth would “need to moderate to around 3.25% to 3.5% to be consistent with price stability.”‘UNPRECEDENTED’Fed officials have been less specific about what will bring things into balance, with some of the working ideas requiring U.S. job markets to act differently than they have in the past.Fed Governor Christopher Waller has pointed to the Beveridge Curve, which plots the relationship between job openings and the unemployment rate, to argue that the labor market could behave differently this time.The current ratio of two job openings for each unemployed person is a record high. Typically when the job vacancy rate falls, the unemployment rate rises as it becomes harder for job seekers to find a match. But Waller argues the Beveridge Curve changed during the pandemic, and is in a place now that would allow job openings to fall sharply as the economy slows, relieving pressure on wages and prices, without much of a rise in unemployment.”We recognize that it would be unprecedented for vacancies to decline by a large amount without the economy falling into recession…We are, in effect, saying that something unprecedented can occur because the labor market is in an unprecedented situation,” Waller wrote in a research note published by the Fed in late July.Other soft-landing narratives also hang on history not repeating.HELPING HANDIn June, for example, the median estimate among Fed officials was for unemployment to rise somewhat – but only to about 4.1% by the end of 2024, a slow and limited climb.Updated projections are due to be released at the end of the Fed’s policy meeting on September 20-21. If, as expected, those projections show higher unemployment, the chances for a soft landing will confront an unpleasant historical fact: Once the U.S. unemployment rate increases beyond a certain amount, it tends to keep rising.Since at least the late 1940s, even modest increases of half a percentage point in the unemployment rate from a year earlier – the magnitude of increase Fed officials have begun to hint at – have tended to spiral to jumps of 2 percentage points or more.At the current labor force level of 164.7 million, that would translate into around 3.3 million fewer people employed – below some estimates but still high.”Usually, once the labor market gets going downhill, it picks up speed and it goes” further downhill, said Claudia Sahm, a former Fed economist and founder of Sahm Consulting.As a Fed economist, she developed the eponymous “Sahm Rule,” which says that once the three-month average unemployment rate rises half a percentage point from its recent low, the economy is already in recession. Given the oddities of the pandemic-era labor market, however, she’s open to an exception this time. Sahm’s baseline is for a rise in the unemployment rate to around 4%, which would translate into a loss of fewer than a million jobs, but for the economy to avoid a recession.A lot would have to go right to get that outcome.The August jobs report shows how it could work: An unemployment rate driven higher by more people joining the labor force rather than by the rounds of layoffs seen during a recession.The best outcome for the Fed “hinges on supply chains healing, more people coming back into the workforce, more price sensitivity by consumers,” Sahm said. “It’s a normalization of the economy.”If that doesn’t happen, and labor market pain increases, the Fed would have options, including raising the inflation target from the current 2%. Brusuelas estimates that getting to a 3% inflation rate would cost 3.6 million fewer jobs than insisting on hitting the current target, with the unemployment rate rising by just over one percentage point from the current level.So far, that’s not a conversation the Fed wants to have.”We’ve communicated over and over and over again our commitment to achieve that 2% goal,” New York Fed President John Williams told the Wall Street Journal this week. “I think it’ll take a few years, but there’s no confusion … We’re absolutely committed to doing it.” More

WASHINGTON (Reuters) – The Federal Trade Commission said it would appeal a decision issued on Thursday by the agency’s chief administrative judge in favor of Illumina Inc (NASDAQ:ILMN)’s $7.1 billion acquisition of cancer detection test maker Grail Inc.Judge D. Michael Chappell ruled the acquisition will not hurt competition, in a blow to the agency, which was challenging the deal. The ruling has not yet been made public.Under FTC rules, the decision is subject to review by the full Federal Trade Commission. The FTC staff filed a notice Friday https://www.ftc.gov/system/files/ftc_gov/pdf/D09401CCNoticeofAppeal.pdf appealing the decision. Illumina shares closed down 2.3% on Friday.Increasing competition has been a mandate of the Biden administration, and the director of the FTC’s Bureau of Competition, Holly Vedova, had said on Thursday the agency was considering challenging the judge’s ruling.The FTC filed a lawsuit in March 2021 to stop Illumina’s deal to buy its former subsidiary Grail, arguing it would slow innovation for tests designed to detect multiple kinds of cancer. The vote to sue was unanimous.The FTC has said Illumina is the dominant provider of DNA sequencing for multi-cancer early detection tests, which Grail uses to make a blood test to detect cancers.The deal would mean Illumina would have no incentive to provide the DNA sequencing to Grail’s rivals, or would have an incentive to try to raise their costs, the FTC had argued.But the judge “rejected the FTC’s position that the deal would adversely affect competition in a putative market for multi-cancer early detection tests,” Illumina said on Thursday.Reuters reported in July that Illumina’s acquisition of Grail will likely be blocked by EU antitrust regulators because of concerns about concessions offered by the U.S. life sciences firm.Illumina closed the deal in August 2021 but said it would hold Grail as a separate company with regard to the EU review.]The FTC in May 2021 dismissed its federal court lawsuit, preferring to go ahead with the administrative proceeding, arguing the federal court case was no longer needed since the European Commission was investigating. More

(Reuters) -Private equity firm Oak Street Real Estate Capital LLC has made an offer to acquire as much as $2 billion of property from Kohl’s Corp (NYSE:KSS) and have the U.S. retailer lease back its stores, according to people familiar with the matter.Oak Street’s interest offers Kohl’s another chance to cut a deal after negotiations to sell itself to Franchise Group (NASDAQ:FRG) Inc, owner of the Vitamin Shoppe, for almost $8 billion fell through in July over the department store operator’s deteriorating business prospects. Oak Street had sought to help finance Franchise Group’s bid. Oak Street has now offered between $1.5 billion and $2 billion to buy real estate from Kohl’s and the two sides have met in the last few days to discuss a possible deal, the sources said. There is no certainty that negotiations will continue and that a deal will be reached, the sources added.It was not clear how many of Kohl’s 1,100 stores would be involved in any deal with Oak Street.Oak Street representatives declined to comment, while a Kohl’s spokesperson could not be reached for comment.Kohl’s shares jumped 9% on the news in New York on Friday to $31.04, giving the company a market capitalization of almost $4 billion. The stock had tumbled nearly 43% since January.Kohl’s said in July after the deal negotiations with Franchise Group fell through that it was looking at ways to monetize its real estate. Sale-leasebacks turn retailers from landlords into tenants in their stores, allowing them to cash out on the equity of the real estate they have accumulated. They also saddle them with lease obligations.Oak Street has completed such deals with several retailers, including Bed Bath & Beyond Inc (NASDAQ:BBBY) and Big Lots (NYSE:BIG) Inc.Kohl’s reported last month that its latest quarterly earnings tumbled on lower sales, forcing management to cut guidance for the year. Blaming high inflation for causing shoppers to pull back, Kohl’s reported a 63% drop in net income for the quarter that ended on July 30. The company also said sales could drop by 5% to 6% this year after having previously said that sales might be flat or rise slightly. More

Crude markets are zeroed in on oil producing group OPEC’s latest meeting, while a new leader in Britain confronts a barrage of economic challenges.Here is a look at the week ahead in markets from Dhara Ranasinghe, Tommy Wilkes and Vincent Flasseur in London, Kevin Buckland in Tokyo, Lewis Krauskopf and Ira Iosebashvili in New York and Riddhima Talwani in New Delhi. 1/FRONT-LOADING    The European Central Bank appears set to deliver a second, (big) interest-rate hike on Thursday – front-loading policy tightening before economic conditions deteriorate further.     With record-high inflation fast approaching double digits a key question is whether the ECB will go for a 50-basis-point hike, as it did in July, or opt for a supersized 75-bps move.    Some (such as Goldman Sachs (NYSE:GS)) expect the latter after the latest inflation data, while some ECB officials believe a 75-bps move should be at least discussed.     Board member Isabel Schnabel warns that central banks risk losing public trust and must act forcefully to curb inflation, even if that drags their economies into a recession. Graphic: ECB set for a second big rate hike – https://graphics.reuters.com/EUROZONE-MARKETS/ECB/gdpzyxrmwvw/chart.png 2/CRUDE OUTCOMESVolatile oil markets could see another shake-up stemming from Monday’s meeting of the Organization of the Petroleum Exporting Countries and allies including Russia.The OPEC+ gathering is in focus after Saudi Arabia recently raised the possibility of production cuts.Surging energy costs this year have plagued global economies as Russia’s invasion of Ukraine exacerbated supply concerns. Oil prices moderated over the summer amid some uncertainty over fuel demand, with central banks raising interest rates to squash inflation.Benchmark Brent was recently in retreat to around $93 a barrel after breaching $105 on Monday. Graphic: Crude oil prices turn more volatile – https://graphics.reuters.com/GLOBAL-MARKETS/THEMES/egpbkrngqvq/chart.png 3/TO-DO LIST FOR NEW PM     Britain’s new prime minister is set to be announced on Monday after a nearly two-month-long contest to succeed Boris Johnson as the leader of the ruling Conservative Party.    Liz Truss, the foreign minister, is expected to win after a campaign full of promises to slash taxes to kickstart economic growth. Her rival, ex-finance minister Rishi Sunak, has accused her of making unfunded policy pledges that will stoke inflation and threaten Britain’s public finances.       Whoever is crowned leader will face one of the most daunting economic backdrops in decades. The Bank of England is hiking interest rates rapidly to tame surging inflation, just as the economy is tipped to slide into a recession that the BoE forecasts will last until 2024.    Along with issues including addressing soaring energy bills, the new prime minister will want to calm financial markets. British government bonds suffered their worst month in August since records began, and the pound recently dropped to a 2-1/2 year low as investors dumped UK assets, fearful the country is in a worse position than elsewhere. Graphic: UK government bonds selloff – https://graphics.reuters.com/GLOBAL-MARKETS/THEMES/byprjgobxpe/chart.png 4/RAMPING UP RATES    The Reserve Bank of Australia is set to deliver another 50-basis-point rate hike on Tuesday, as it scrambles to contain the highest inflation in more than two decades.    It has raised rates every month since May, but RBA policymakers, analysts and investors all agree that the most aggressive tightening since the early ’90s leaves much to be done.    The central bank got badly wrong-footed at the outset: Governor Philip Lowe had said early on that borrowing costs would not need to rise until 2024.    The race to raise rates has not done much to buoy the Aussie dollar, which has been bumping along near a six-week low versus a resurgent greenback.Canada’s central bank, meanwhile, is widely expected to deliver another big rate hike on Wednesday. Graphic: The race to raise rates – https://graphics.reuters.com/GLOBAL-MARKETS/THEMES/akpezbgwmvr/chart.png 5/SERVICES STRENGTHInvestors gauging the Federal Reserve’s interest rate path for the months ahead get another morsel of economic data on Tuesday, when the Institute for Supply Management (ISM) reports the results of its monthly services sector survey.U.S. stocks weakened in the days following the hawkish message from Fed Chair Jerome Powell at August’s Jackson Hole conference, which left little doubt the central bank was determined to go all out in its fight against inflation.Yet upcoming economic indicators starting with the ISM index could shape views of the rate trajectory, with signs of continued strength bolstering the case for the Fed to continue going full throttle.The U.S. services industry unexpectedly picked up in July, adding to a panoply of data showing the economy was humming along despite several big rate hikes. Analysts polled by Reuters expect a reading of 54.8 for August. Graphic: Service sector’s optimistic outlook – https://graphics.reuters.com/GLOBAL-MARKETS/THEMES/movanenwzpa/chart.png More