Queen Elizabeth II died at the age of 96. Britain has declared mourning

By JustForex

Queen Elizabeth II, the longest reigning monarch in British history, died at age 96, Buckingham Palace announced Thursday. The 96-year-old queen ascended the throne in 1952 at age 25, after the death of her father, King George VI, as Britain was recovering from World War II. A 10-day mourning period has been declared in Britain.

The US stocks increased on Thursday despite hawkish comments from Federal Reserve Chairman Jerome Powell about another major interest rate hike in September. There is a nearly 90% chance of such a move. Goldman Sachs also raised its interest rate forecast to 75 basis points this month from 50 basis points earlier. Chicago Fed President Charles L. Evans, who tends to take a dovish side in the monetary policy debate, said Thursday that the Fed may well raise the rate by 75 basis points at its September meeting.

As the stock market closed yesterday, the Dow Jones Index (US30) increased by 0.61%, and the S&P500 Index (US500) added 0.66%. The NASDAQ Technology Index (US100) jumped by 0.60% on Thursday. The S&P 500 Index is still nearly 8% away from its August peak and is down about 17% since the beginning of the year.

Equity markets in Europe traded without a single dynamic yesterday. Germany’s DAX (DE30) lost 0.09%, France’s CAC 40 (FR40) added 0.33%, Spain’s IBEX 35 Index (ES35) increased by 0.78% and the British FTSE  100 (UK100) closed on Tuesday in plus 0.33%.

The European Central Bank raised its three official interest rates by 75 basis points, the largest interest rate change in ECB history. The Сentral Bank also warned of further hikes as it struggles to bring record-high inflation back under control. At her regular press conference, ECB President Christine Lagarde said she expects the ECB to raise rates by “more than two more but less than five” meetings in the future, but left open the question of the extent of these rate changes. She stressed that steps of 75 basis points “are not the norm,” but said she did not know at what level the bank could stop tightening.

The new British prime minister, Liz Truss, announced yesterday that a household will now pay no more than 2,500 pounds ($2,880) a year for each for the next two years. The restriction will take effect October 1. According to politicians, such a move will reduce inflation to 5%. A similar guarantee for businesses will be in effect for the next six months. Then there will be further support for vulnerable sectors. Reports also said that a £40 billion package would be passed to support businesses with their energy costs, bringing the total expected amount of support measures to £180 billion.

Crude oil prices rose about 1% on Thursday after falling to a seven-month low in the previous session as Russia threatened to halt oil and gas exports to some customers. The US crude inventories data showed an unexpected increase of 8.8 million barrels last week.

Asian markets traded flat yesterday. Japan’s Nikkei 225 (JP225) gained 2.31% yesterday, Hong Kong’s Hang Seng (HK50) decreased by 1.00%, and Australia’s S&P/ASX 200 (AU200) added 1.77% by the end of the day.

The Chinese economy is under pressure because of the ongoing restrictions. Yesterday the second largest city of Chengdu extended the quarantine as the number of cases of coronavirus infection increased. With rising inflation and problems facing the economy, the People’s Bank of China must decide whether it will prioritize supporting the economy. China’s inflation rate decreased from 2.7% to 2.5% in annual terms.

S&P 500 (F) (US500) 4,006.18 +26.31 (+0.66%)

Dow Jones (US30) 31,581.28 +193.24 (+0.61%)

DAX (DE40) 12,904.32 −11.65 (−0.090%)

FTSE 100 (UK100) +24.23 −62.61 (+0.33%)

USD Index 109.67 +0.17 (+0.16%)

• – Japan GDP (q/q) at 02:50 (GMT+3);
• – China Consumer Price Index (m/m) at 04:30 (GMT+3);
• – China Producer Price Index (m/m) at 04:30 (GMT+3);
• – Canada Unemployment Rate (m/m) at 15:30 (GMT+3);
• – US FOMC Member George Speaks (m/m) at 19:00 (GMT+3).

By JustForex

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.