European markets close higher after ECB rate hike; Stoxx 600 up 0.5%

U.S. stocks opened lower on Thursday as Wall Street braced for bigger rate hikes after the ECB’s hike.

The Dow Jones Industrial Average fell 1% while the S&P 500 and Nasdaq were both down 0.8%.

— Karen Gilchrist

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 current 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. communicated.

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

— Jenny Reid

British Prime Minister Liz Truss has announced 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”.

Prior to the announcement, Britons’ energy bills were expected to hit £3,549 a year from October 1, up from £1,971 previously.

The stimulus package comes as more than 180,000 people in the UK have pledged to cancel their energy bill payments on October 1 in protest at rising energy prices.

—Hannah Ward-Glenton

The euro rose against the US dollar and the British pound as investors awaited the announcement of the ECB’s rate hike.

The euro was trading up 0.1% at $1.0015 around midday in London. On Monday, the common currency fell below 99 cents for the first time in 20 years due to energy security fears.

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.

—Jenni Reid

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 biotech company Genus was the biggest gainer, up 7.9%, after posting higher profits in annual results.

At the other end of the scale, French IT and consulting firm Atos fell 12.75%.

—Jenni Reid

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.

ECB Executive Board member Isabel Schnabel’s speech 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

—Holly Ellyatt

According to Wells Fargo Securities FX strategist Brendan McKenna, the US dollar still has room to climb even higher thanks to rate differentials on the back of a hawkish Federal Reserve.

“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 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

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 learn more here.

— Zavier Ong

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.

—Carmen Reinicke

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.