US stocks open lower
US stocks opened lower on Thursday as Wall Street braces for further big rate hikes following the rise in the ECB.
The Dow Jones Industrial Average fell 1% while the S&P 500 and Nasdaq were both down 0.8%.
— Karen Gilchrist
European Central Bank raises rates by 75 basis points to tackle soaring inflation
The European Central Bank on Thursday announced a 75 basis point hike in interest rates, taking its benchmark deposit rate to 0.75%.
“This major step precipitates the transition from the very accommodative level of policy rates to levels that will ensure the rapid return of inflation to the ECB’s medium-term target of 2%,” he said in a statement. .
He added that he “expects to raise interest rates further as inflation remains far too high and is expected to remain above target for an extended period.”
Read the whole story here: European Central Bank raises rates by 75 basis points to tackle soaring inflation
— Jenni Reid
New UK PM Liz Truss announces cap on energy bills to tackle cost of living crisis
British Prime Minister Liz Truss announcement a stimulus package to help Britons cope with soaring energy bills.
Truss said the typical household ‘will pay no more than £2,500 ($2,880) a year for each of the next two years’, which the Prime Minister says will give the average household ‘a saving of £1,000 per year”.
Before the announcement, Britons’ energy bills were should reach £3,549 per year from October 1, from £1,971.
The recovery plan comes as more than 180,000 people in the UK have committed to canceling the payment of their energy bills on October 1 to protest against rising energy prices.
Euro appreciates ahead of ECB rate decision
Pound woes continue ahead of UK energy support announcement
Questions about the impact of the support package on UK growth and net debt have combined with continued dollar strength amid volatile markets.
The euro was up 0.24% against the pound at 0.8639 ahead of the ECB announcement, but down 0.17% against the dollar at 0.9986.
European stocks start the day higher
Most sectors were trading higher early Thursday as energy security continued to dominate the headlines and investors awaited a decision on rate hikes by the European Central Bank.
Only retail stocks saw a significant decline in early trade, losing 1.67%. Oil and gas activities rose 0.14% after leading losses on Wednesday.
British biotechnology company Gender was the biggest gainer, up 7.9%, after posting higher earnings in annual results.
At the other end of the scale, a French IT and consulting company Atos fell 12.75%.
European Central Bank could trigger huge rate hike as economy slides into recession
The European Central Bank is expected to anticipate a series of rate hikes and sacrifice growth in the region as the rising cost of living threatens to soar even higher.
Speech by Isabel Schnabel, Member of the Executive Board of the ECB, in Jackson Hole set the tone for the next policy meeting this week. With inflation in the Eurozone expected to reach at least 10% in the coming months and the risk of a spike in consumer prices, a “jumbo” rate hike of 75 basis points on Thursday is certainly a possibility.
“As early hikes can have a bigger impact on inflation expectations than a more gradual approach, a move of 75 basis points could make sense,” said Holger Schmieding, ECB watchdog and chief economist. de Berenberg, in a research note.
Read the whole story here: European Central Bank could trigger huge rate hike as economy slides into recession
US dollar has legs to go even higher, says Wells Fargo strategist
The American dollars has room to rise even further thanks to rate differentials on the back of a hawkish Federal Reserve, according to Wells Fargo Securities FX strategist Brendan McKenna.
“We think a lot of these international banks won’t be able to raise rates as aggressively as the markets expect,” he told CNBC’s “Squawk Box Asia.”
“So it’s sort of a combination of a more hawkish Fed and a less hawkish tightening cycle from those international central banks that are supporting the dollar for the rest of this year,” he said. declared.
– Jihye Lee
Goldman Sachs raises forecast for Fed hike this year
Goldman Sachs has revised its forecast for the next year of Federal Reserve rate decisions.
Analysts led by chief economist Jan Hatzius said in a note that the company expects a 75 basis point hike in September, compared to a previous forecast of 50 basis points, as well as an increase of 50 basis points in November, also revised. compared to a previous projection of 25 basis points.
He also expects a 25 basis point hike in December – citing officials’ recent hawkish comment.
The note said Fed officials “appeared to imply that progress toward inflation control has not been as uniform or as rapid as they would like,” the note said.
– Jihye Lee
CNBC Pro: Wall Street pro predicts when the S&P 500 will rally – and reveals how to trade it
Market volatility is here to stay, according to market veteran Phil Blancato.
But the chairman and chief executive of Ladenburg Thalmann Asset Management sees a “strong rally” on the cards as market conditions improve.
It predicts when the rally will take place and names its top picks for trading volatility.
Pro subscribers can find out more here.
— Zavier Ong
All major averages close higher, Nasdaq sets off 7-day losing streak
Stocks rallied on Wednesday as Wall Street shrugged off concerns about aggressive rate hikes from the Federal Reserve.
The Dow Jones Industrial Average gained 435.98 points, or 1.40%, to end the day at 31,581.28. The S&P 500 rose 1.83% to 3,979.90 and the Nasdaq Composite rose 2.14% to 11,791.90, breaking a seven-day losing streak.
European markets: here are the opening calls
European stocks are set to open cautiously higher on Wednesday with the UK FTSE the index rose 18 points to 7,560, Germany DAX 33 points more to 13,944, France CAC 40 up 18 points to 6,616 and Italy MIB FTSE up 42 points to 23,029, according to IG data.
The data releases include preliminary eurozone unemployment data for the second quarter as well as gross domestic product for the second quarter. The latest UK inflation figures for July will be released along with the preliminary Dutch Q2 GDP.
Revenue comes from Uniper, Carlsberg, Persimmon, Balfour Beatty, BAT and National Grid.