Global Markets Shaken by Oil Price Surge, Fed Rate Hike Expectations

Global markets are on edge as the US Federal Reserve meets to tackle high inflation. Oil prices have surged, reaching $107.32 per barrel for Brent North Sea Crude and $103.54 per barrel for West Texas Intermediate. The increase in energy costs has put pressure on central banks to raise borrowing costs, with the European Central Bank lifting interest rates in the eurozone last week.

The rand is weaker against major currencies due to a firmer dollar and rising US yields. Susannah Streeter, chief investment strategist at Wealth Club, noted that 'there's no let-up in the volatility rippling through financial markets.' Analysts predict a 25-basis-point rate hike for local interest rates when the Monetary Policy Committee meets later this month.

Market expectations for a rate increase have surged after official data showed US annual inflation remaining above the Fed's target. The surge has also led to renewed weakness in technology stocks due to concerns about artificial intelligence and its potential impact on humanity. Microsoft published a 'humanist AI code of conduct' to address these concerns.