In US economic data, housing starts fell by 14.4% in May to a 1.549 million annualised rate (survey: 1.69m). Building permits dipped 7.0% in May to a 1.695 million annualised rate (survey: 1.78m). The Philadelphia Fed manufacturing index fell from +2.6 points to -3.3 points in June (survey: +5 points). Initial jobless claims fell by 3,000 to 229,000 last week (survey: 217,000).

European sharemarkets dropped to their lowest level in 16 months on Thursday on inflation and growth concerns. The pan-European STOXX 600 index fell by 2.5% after the Swiss National Bank unexpectedly hiked its policy rate by 50 basis points to -0.25%, its first increase since 2007. And the Bank of England implemented a fifth consecutive rate hike, increasing the Bank Rate by 25 basis points to 1.25%. The German Dax index shed 3.3% and the UK FTSE index lost 3.1%. In London trade, shares of Rio Tinto (-3.4%) and BHP (-4.0%) were both lower.

US sharemarkets tumbled on Thursday, with technology shares leading the rout, after the US Federal Reserve’s largest rate increase since 1994 to combat decades-high inflation fanned worries of a
recession. Shares of mega cap growth companies Apple (-4.0%), Microsoft (-2.7%) and Tesla (-8.5%) all weighed on indexes. The Dow Jones index fell by 741 points or 2.4% after being down 928 points at
session lows. The Dow fell below 30,000 points for the first time since January 2021. The S&P 500 index lost 3.3% and the Nasdaq index dropped by 453 points or 4.1%.

US treasuries rose on Thursday (yields lower) as fears of a recession dented risk appetite and boosted demand for safe haven US debt. US 10-year yields fell by around 15 points to near 3.24%. And US 2-year yields dipped by around 16 points to near 3.11%.

Major currencies were firmer against the US dollar in European and US trade. The Euro rose from lows near US$1.0379 to highs near US$1.0599 and was near US$1.0550 at the US close. The Aussie dollar lifted from lows near US69.45 cents to highs near US70.68 cents and was near US70.45 cents at the US close. And the Japanese yen firmed from near 134.62 yen per US dollar to JPY131.54 and was near its JPY132.20 at the US close.

Global oil prices rose on Thursday on supply concerns after the US announced new sanctions on Chinese, Emirati and Iranian firms that help export Iran’s petrochemicals. The Brent crude price lifted by US$1.30 or 1.1% to US$119.81 a barrel. And the US Nymex crude price added US$2.27 or 2.0% to US$117.58 a barrel.

Base metal prices were mostly lower on Thursday as the outlook for demand deteriorated after the US Federal Reserve’s rate hike fuelled worries about a possible recession. Aluminium fell by 3.4% with copper down 1.6%. But lead was up 1.3%.

The gold futures price rose by US$30.30 or 1.7% to US$1,849.90an ounce. Spot gold was trading near US$1,855 an ounce at the USclose. The iron ore futures price fell by US43 cents or 0.3% to US$135.04 a tonne, down for a sixth straight session, due to a gloomy demand outlook.

Ahead: In the US, Federal Reserve Chair Jerome Powell delivers a speech. Industrial production data and the Conference Board leading index are due.

Originally published by CommSec