- Opening is expected with sharp falls in the US.
- Bank of England rises by 25 basis points, Switzerland surprises with a rise of 50 points.
- The dollar recovers ground, but the yen and the franc lead.
Markets are falling on Thursday, the day after the Fed’s decision, more than reversing Wednesday’s rally. Switzerland joins the interest rate hikes.
Widespread strong red
After rising 1.45% on Wednesday, S&P futures are down 2.25% on Thursday. The Dow Jones yields 2.25% and the Nasdaq 2.60%. In Europe, the main markets fall by an average of 2.80%. This occurs before the rise in rates throughout the world and fears about the global economic outlook.
On Wednesday, the equity markets had reacted positively after the rise in rates of the Federal Reserve of 75 basis points (the largest since 1994) and after a cautious message from Jerome Powell. The dollar he even lost ground but on Thursday he is already recovering everything he had lost.
The yields of Treasury bond they are on the rise again. The 10-year tranche is at 3.45% and the 30-year is at 3.44%, having reached 3.49% hours ago, the highest level since 2014. This is giving some support to the dollar. DXY is back above 105.00. In the US, data on jobless claims and the housing starts report will be published on Thursday.
Among the currencies, the one that rises the most is the Swiss franc, boosted after the surprising rise in the interest rate of the Swiss National Bank (SNB). It was the first move in that direction since 2007. USD/CHF is trading below 0.9800 and EUR/CHF went from around 1.0400 to 1.0150 in a few hours. European bond yields took a hit from the SNB. The German 10-year bond hit 1.92%, the highest since January 2014.
The Bank of England also raised rates, as expected by 25 basis points. The pound was not affected by the decision. On Friday it will be the turn of the Bank of Japan, although no changes in monetary policy are expected.
The cryptocurrencies they cannot get out of the bad moment and fears are increasing for the platforms and the lenders in these currencies. Bitcoin is falling on Thursday and is trading below $21,000.
The prices of Petroleum they are retreating on Thursday, with falls greater than 1.5%. The negative climate and the vision of a global recession drive the declines. As US President Joe Biden pressures oil companies to increase capacity.
The actions of Twitter they escape the bad moment and rise 1.80% in the premaket before the possibility that Elon Musk reiterates his desire to buy the company. Amazon loses 2.80%, Tesla 3.55% and Microsoft 2%. Among the companies that will present results on Thursday are Beyond Air, Kroger and Adobe.
Technical levels
Source: Fx Street
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