The European Central Bank (ECB) lifted its benchmark deposit facility rate by an unprecedented 75 basis points to 0.75% and promised further hikes to tackle soaring inflation.
US Federal Reserve Chair Jerome Powell said the US central bank is “strongly committed” to fighting inflation and will not flinch in its efforts to curb price pressures “until the job is done” at the Cato Institute’s monetary policy conference in Washington.
In US economic data, initial jobless claims fell by 6,000 to a 3- month low of 222,000 in the past week (survey: 235,000).
European sharemarkets were mixed on Thursday. The panEuropean STOXX 600 index rose by 0.5% with bank stocks up 2.3% after the ECB delivered its biggest ever rate hike. But the German Dax index fell by 0.1%. And the UK FTSE index rose by 0.3% but lost ground in afternoon trading on mounting concerns over the health of Queen Elizabeth II. In London trade, shares in Rio Tinto rose by 2.0% and BHP shares added 2.9%.
US sharemarkets climbed in a volatile trading session on Thursday. Investors digested hawkish remarks from US policymakers that cemented bets of a large interest rate hike later this month. Shares of JPMorgan Chase (+2.3%) and Goldman Sachs (+1.5%) both lifted. And shares of drug maker Regeneron Pharmaceutical jumped 18.9% on positive trial results for a potential retinal treatment. At the close of trade, the Dow Jones index rose by 193 points or 0.6% after being down by 259 points at session lows. The S&P 500 index gained 0.7% and the Nasdaq index added 70 points or 0.6%.
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US treasury yields rose on Thursday after Chicago Federal Reserve President Charles Evans said “we could very well do 75 [basis points] in September.” US 10-year yields rose by 6 points to near 3.32%. And US 2-year yields lifted 6 points to near 3.51%.
Major currencies were weaker against the US dollar in European and US trade. The Euro fell from highs near US$1.0026 to lows near US$0.9932 and was near US$0.9995 at the US close. The Aussie dollar eased from highs near US67.63 cents to lows near US67.19 cents and was near US67.50 cents at the US close. And the Japanese yen eased from near 143.33 yen per US dollar to JPY144.37 and was near JPY144.05 at the US close.
Global oil prices rose by up to 2% on Thursday after Russia threatened to halt oil and gas exports to some buyers. The EIA reported that US crude stockpiles surged by 8.85 million barrels last week. The Brent crude oil price rose by US$1.15 or 1.3% to US$89.15 a barrel. And the US Nymex crude oil price lifted by US$1.60 or 2.0% to US$83.54 a barrel.
Base metals were mixed on Thursday with copper up 2.9% and aluminium 1.4% higher on supply worries, but lead fell by 1.1%.
The gold futures price fell by US$7.60 an ounce or 0.4% to US$1,720.20 an ounce. Spot gold was trading near US$1,708 an ounce at the US close. Iron ore futures rose by US$2.91 or 3.0% to US$100.09 a tonne.
Ahead: In Australia, skilled job vacancies data is issued. Chinese inflation data is due. And US inventories figures are released.
Originally published by CommSec