European markets slide as investors digest more interest rate hikes;  BOE raises rates

European markets slide as investors digest more interest rate hikes; BOE raises rates

US stocks open mixed

US stocks opened weakly on Thursday following the Federal Reserve’s decision on Wednesday to implement its third consecutive 0.75% interest rate hike.

The Dow Jones Industrial Average and S&P 500 hovered around the fixed line in early trades, while the Nasdaq was down 0.2%.

— Karen Gilchrist

Bank of England raises rates by 50 basis points, for the seventh consecutive hike

The Bank of England voted to raise interest rates by 50 basis points, lower than the 75 basis point rise expected by some analysts.

The bank said there had been further signs since August of “continued strength in nationally generated inflation”, but the recent announcement of caps on household and business energy bills would reduce the rise. consumer price index in the future.

The pound was up slightly on the day around the $1.13 mark.

—Jenni Reid

The British regulator will probe the cloud market

Britain’s media regulator Ofcom said on Thursday it would launch an investigation into Amazon, Microsoft and Google’s dominance in the £15 billion public cloud infrastructure market.

Learn more here.

The probe will focus on so-called “hyperscalers” like Amazon Web Services and Microsoft Azure, which allow companies to access computing power and data storage from remote servers. Together, Amazon, Microsoft and Google generate about 81% of market revenue, according to Ofcom.

A final report will be published within 12 months detailing all concerns and proposed recommendations, the regulator said, adding that further action could be taken if it finds that competition and innovation are restricted in any way. that is.

Over the next year, Ofcom plans to launch additional probes into other digital markets, including personal messaging and virtual assistants.

—Ryan Browne

Bank stocks outperform other sectors, but gains are marginal

Banking stocks were the best performers in Europe at midday, with the sector up 1.3% since yesterday.

Soaring inflation is prompting central banks in the region to raise interest rates, generating additional profits for banks in the region.

Pan-European bank Unicredit led the way with a 6.4% jump in shares after chief executive Andrea Orcel announced the bank would raise its guidance for the year during third-quarter results in October.

Shares of Spanish banking group Banco Sabadell rose 5.2% as the organization entered talks with Worldline, Nexi and Fiserv for a possible payment deal.

Shares of Deutsche Bank followed the trend rising 4.9%, after Chief Financial Officer James Bon Moltke said the bank would approach 2023 “with caution” at a financial conference.

Finecobank, Commerzbank, Banco BPM Group, Societe Generale and Caixabank are all up at least 3%.

—Hannah Ward-Glenton

Swiss franc weakens significantly against dollar, euro and pound after rate hike

The Swiss franc weakened considerably against the US dollar, the euro and the pound following the central bank’s decision to raise interest rates by 75 basis points to 0.5%.

As of 9:30 a.m. London time, the dollar was up 0.9% against the Swiss currency, while the euro and the pound sterling were both up around 1.4% against the franc.

Earlier this week, the Swiss franc hit its highest level against the euro since January 2015, as economists began speculating on the prospect of a 75 basis point rise.

—Hannah Ward-Glenton

Norway’s central bank raises interest rate to 2.25%

Norway’s central bank raised its interest rate from 1.75% to 2.25% and indicated that it plans to raise rates later this year.

There are “clear signs of a slowing economy,” Norges Bank said in a statement, and “the easing of pressures on the economy will help rein in inflation further.”

Based on the current assessment of the monetary policy committee, the key rate will most likely be raised further in November, according to the bank.

—Hannah Ward-Glenton

The Swiss National Bank raises its key rate to 0.5%

The Swiss National Bank raised its key interest rate to 0.5%, a change that ends an era of negative rates in Europe.

The 75 basis point rise follows a rise to -0.25% on June 16, which was the first rate hike in 15 years. Previously, the Swiss central bank had kept rates at -0.75% since 2015.

Inflation in Switzerland is currently at its highest level in three decades, reaching 3.5% last month.

—Hannah Ward-Glenton

Italy goes to the polls on Sunday, here’s what to expect

Italian voters head to the polls on Sunday in a snap general election that is expected to see a government led by a far-right party come to power.

If this happens, it will mark a massive political change for a country already struggling with continued economic and political instability.

Polls prior to September 9 (when a blackout period began) showed a right-wing coalition easily winning the majority of seats in the reduced lower and upper houses of parliament.

Atmosphere during Giorgia Meloni’s rally in Cagliari to launch her campaign for the upcoming Italian general elections in Cagliari on September 02, 2022 in Cagliari, Italy. Italians go to the polls for the general elections on September 25, 2022.

Emmanuelle Perrone | Getty Images News | Getty Images

The coalition is led by Giorgia Meloni’s far-right Fratelli d’Italia (Brothers of Italy), and includes three other right-wing parties: Lega, under Matteo Salvini, Silvio Berlusconi’s Forza Italia and a more minor coalition partner , Noi Moderati.

The party of the Brothers of Italy stands out and should win the largest share of the votes for a single party. We see him getting almost 25% of the vote, according to poll aggregator Politiche 2022, far ahead of his closest right-wing ally, Lega, who is expected to get around 12% of the vote.

Read more about the upcoming elections here

—Holly Ellyatt

Opening of the market: Fortum up 4%, Accor down 6%

Shares of Fortum rose again in early trading on Thursday after the Finnish company agreed to sell its 56% stake in German utility Uniper to the German government. The public energy company transferred its stake in a nationalization agreement.

French hotel company Accor saw its shares fall 6.3% at the market open after JP Morgan downgraded its rating on the stock from neutral to underweight. The investment bank expressed concern the group could not return to its previous level of profitability, saying “our concerns have now outgrown the reasons why we like it”.

—Hannah Ward-Glenton

Credit Suisse plans to split its investment bank into three: The FT

Credit Suisse is considering splitting its investment bank into three, according to the Financial Times.

The Swiss lender wants to have a separate “bad bank” exclusively for risky assets as it recovers from years of scandals and gaffes.

New proposals suggest Credit Suisse will sell off some of its profitable units as part of the sweeping reshuffle, with full plans expected to be announced during the bank’s third quarter results on October 27, the FT reported.

—Hannah Ward-Glenton

Oil prices climb after Fed rate hikes, demand fears persist

Oil prices rose after the Fed’s third consecutive rate hike.

Reuters also reported that Chinese refiners expect the country to release up to 15 million tonnes of petroleum product export quotas for the rest of the year, citing people with knowledge of the matter.

Brent crude futures rose 0.45% to $90.24 a barrel, while US West Texas Intermediate also gained 0.45% to $83.3 a barrel.

— Lee Ying Shan

Fed hike should keep Asian risky assets under pressure, says JPMorgan

Asian risk assets, especially export-oriented companies, will remain under pressure in the near term after the Fed’s rate hike, according to Tai Hui, chief APAC market strategist at JPMorgan Asset Management.

Tai added that a strong U.S. dollar is likely to persist, but monetary policy tightening in most Asian central banks – with the exception of China and Japan – should help limit the extent of currency depreciation. Asian currency.

The U.S. dollar index, which tracks the greenback against a basket of its peers, rose sharply and last stood at 111.697.

—Abigail from

CNBC Pro: This fund manager beats the market. Here’s what he’s betting against

Stock markets are down but the fund managed by Patrick Armstrong at Plurimi Wealth continues to post positive returns. The fund manager has a number of short positions to play on market volatility.

Pro subscribers can learn more here.

— Zavier Ong

CNBC Pro: Morgan Stanley’s Mike Wilson names key attribute he loves in stocks

Morgan Stanley’s Mike Wilson remains on the defensive in the face of continued market volatility this year. It names the key attribute it looks for in actions.

Stocks with this attribute have been “rewarded” this year, with the trend expected to persist until the market turns more bullish, according to Wilson.

Pro subscribers can learn more here.

— Zavier Ong

European markets: here are the opening calls

European stocks are expected to open in negative territory on Wednesday as investors react to the latest US inflation data.

Britain’s FTSE index is expected to open down 47 points to 7,341, Germany’s DAX down 86 points to 13,106, France’s CAC 40 down 28 points and Italy’s FTSE MIB down 132 points to 22,010 , according to data from IG.

Global markets fell following a stronger-than-expected U.S. consumer price index report for August, which showed prices rose 0.1% for the month and by 8.3% a year in August, the Bureau of Labor Statistics reported on Tuesday, defying economists’ expectations that headline inflation would fall 0.1% month-over-month.

Core CPI, which excludes volatile food and energy costs, rose 0.6% from July and 6.3% from August 2021.

UK Inflation figures for August are due and Eurozone Industrial Production for July will be released.

—Holly Ellyatt

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