Higher rates are expected by ECB and BoE

Traders predict that the Bank of England and the European Central Bank will need to take more decisive measures to control the soaring prices exacerbated by Russia’s war in Ukraine. European energy costs are still rising, and additional rate hikes may be beneficial in this regard.

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US GDP shrank by 0.6% in Q2

Following a quarterly decline of 1.6% in Q1, the US economy shrank by an annualized 0.6% in Q2 2022. This matches the second estimate and proves the US had, in fact, entered a recession. US stock indices continue to dive lower.

China orders massive equity buying

China continued its lockdowns that appeared to hurt its economy as the rest of the world said goodbye to COVID. The nation’s real estate market and stock market suffered as a result. Currently, the government has directed state banks to buy equities to stop excessive selling.

Bearish sentiment rules markets

Rate hikes from all central banks worldwide are pushing markets lower. In the last week, DAX 40 fell by 4%, S&P 500 by 6%, and Dow Jones by 5%. Commodities followed, with WTI Crude Oil down 8% and natural gas down 11% for the week.

BoE raised rates by 50 bps

The Bank of England joined Federal Reserve and raised interest rates as expected by 50 bps to fight high inflation. This marks the 7th consecutive rate hike, pushing borrowing costs to the highest since 2008.

Fed increases rates by 0.75%

The Federal Reserve increased its federal funds rate by 0.75% to 3.25%, intensifying its fight against inflation. US markets staged another late-day reversal, giving up their gains. With the Fed’s most recent increase, the short-term benchmark rate is at its highest since 2008.

US Dollar Index at record highs

The dollar index reached 111, the highest point since June 2002. The crisis in Ukraine is expected to worsen as President Putin announced a partial military mobilization in Russia, and investors are fleeing for safety. At the same time, they wait for the FOMC decision later in the day.

More market movers

US GDP shrank by 0.6% in Q2

Following a quarterly decline of 1.6% in Q1, the US economy shrank by an annualized 0.6% in Q2 2022. This matches the second estimate and proves the US had, in fact, entered a recession. US stock indices continue to dive lower.

German inflation is sky-high

The rate of consumer price inflation in Germany increased to 10.0% year-over-year in September 2022. Inflation surpassed market predictions of 9.4% and marked the highest level since 1951 when it peaked at roughly 11.0%.

Crypto Punks NFTs traded 1m ETH

Crypto Punks, the most popular NFT project, just reached an important milestone. The total trading volume on OpenSea crossed 1 million Ethereum today, which is more than $1.3 billion at ETH’s price now. On average, a Crypto Punk NFT sells for approximately $100k, but someone bought Crypto Punk 2924 for $4.3 million today.

FTSE continues to drop

FTSE 100 stock index fell nearly 2% below 6,900, putting significant selling pressure on London’s stocks. Concerns about the interest rate hikes to control inflation continue to hurt markets. Moreover, the effect of the UK’s questionable fiscal strategy on global economic growth continued to dominate sentiment.

WTI Crude oil recovers losses

Worries about limited global supply helped WTI crude futures rise 2% to $80, pulling away from 9-month lows at $76 earlier this week. Hurricane Ian caused a reduction in US crude output of around 190,000 barrels per day, or 11% of the Gulf’s total.

GBP remains volatile

The Bank of England announced that it would start making temporary purchases of long-term UK government bonds on September 28 in order to restore orderly market conditions. The British pound remained volatile, first rising to above $1.08 before dropping to $1.05.

News

The US imposes new sanctions on Iran oil

The sanctions affected companies involved in the petrochemical and oil trade, including companies based in China.
Stanley Druckenmiller disappointed by Fed and favors crypto
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Stanley Druckenmiller disappointed by Fed and favors crypto

After Paul Tudor Jones showed sympathy for crypto, another billionaire joined him. Stanley Druckenmiller thinks cryptos will have a comeback.

DAX erases Wednesday’s gains, remains bearish

Another batch of week data and rising inflation sent EU stocks lower.

UK records highest food inflation in history

Food prices are rising globally along with energy prices. The UK is now seeing the highest rate of inflation in this category.