As expected, the European Central Bank (ECB) hiked its benchmark policy rates by 75 basis points. The benchmark deposit facility rate rose to 1.5%. The ECB signalled that smaller rate hikes lay ahead.

In US data, the economy, as measured by GDP, expanded at a 2.6% annualised rate in the September quarter (survey: +2.4%). GDP prices were up 4.1% on the year (survey: +5.3%). Claims for unemployment benefits rose from 214,000 to 217,000 in the past week (survey: 220,000). Durable goods orders rose by 0.4% in September (survey: +0.6%). The Kansas City Federal Reserve composite activity index fell from +1 to -7 in October (survey: +4).

European sharemarkets rose modestly on Thursday as investors digested the ECB rate hike and earnings results. Banks rose by 0.5% while miners and technology lost 1.7%. Shares in Shell rose 5.5% after the energy producer reported a US$9.45 billion profit for the quarter and announced plans to raise its dividend by year-end. Shares in Credit Suisse slumped 18.6% after it said it planned to raise 4 billion Swiss francs (US$4.05 billion) and cut thousands of jobs. The continent-wide FTSEurofirst 300 index closed up by less than 0.1% after being down 1.2% earlier in the session. And the UK FTSE 100 index rose by 0.3%.

US sharemarkets were mixed on Thursday in response to earnings results and stronger economic data. After releasing earnings, shares in Caterpillar rose 7.7%. Shares in McDonalds rose 3.3% after it beat same store sales estimates. Technology was dragged down by a 24.6% fall in shares of Meta Platforms (Facebook) after the tech giant
provided downbeat guidance. The Dow Jones index rose by 194 points or 0.6% after earlier being up 549 points. But the S&P 500 index slid 0.6% and the Nasdaq index shed 178 points or 1.6%.

US treasuries rose on Thursday (yields lower). The US Treasury sold US$35 billion of 7-year notes into “mediocre” demand at a yield of 4.027%. US 10-year yields fell around 11 points to near 3.91%. And US 2-year yields fell by around 14 points to near 4.28%.

 

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Major currencies were weaker against the US dollar in European and US trade. The Euro fell from highs near US$1.0080 to lows near US$0.9955 and was near US$0.9965 at the US close. The Aussie dollar fell from highs near US65.20 cents to lows near US64.25 cents and was near US64.50 cents at the US close. And the Japanese yen eased from 145.13 yen per US dollar to JPY146.88 and was near JPY146.13 at the US close.

Global oil prices rose by 1.3% on Thursday after data showed a rebound in US economic growth. US crude exports also rose to record levels. The Brent crude oil price rose by US$1.27 or 1.3% to US$96.96 a barrel. And the US Nymex crude oil price lifted by US$1.17 or 1.3% to US$89.08 a barrel.

Base metal prices fell by as much as 2.2% on Thursday with aluminium down the most. But tin edged up 0.1%

The gold futures price fell by US$3.60 an ounce or 0.2% to US$1,665.60 an ounce. Spot gold was trading near US$1,661 an ounce at the US close. Iron ore futures fell by US75 cents or 0.8% to US92.81 a tonne.

Originally published by CommSec