The Bank of England lifted the Bank Rate by three-quarters of a percentage point or 75 basis points to 3.00%, its biggest rate rise since 1989, as it battles the highest inflation in 40 years.

In US economic data, initial jobless claims fell by 1,000 to 217,000 in the past week (survey: 220,000). The ISM services index fell from 56.7 to 54.4 in October (survey: 55.3). Factory orders lifted 0.3% in September (survey: +0.3%). Unit labour costs rose 3.5% in the September quarter (survey: +4%) with nonfarm productivity up 0.3% in the quarter (survey: +0.5%). Challenger job cuts jumped 13% to 33,843 in October (survey: +31,000). The trade deficit widened by US$7.6bn to US$73.3bn in September (survey: -$US72.2bn).

European sharemarkets fell on Thursday with the continent-wide FTSEurofirst 300 index down 0.9%. The index posted its worst single day performance in four weeks after European Central Bank President Christine Lagarde warned that a “mild recession” is possible in Europe. The UK FTSE 100 index rose 0.6%, supported by a weaker pound, after the Bank of England raised interest rates and
warned of a “very challenging outlook.”

US sharemarkets tumbled on Thursday as investors worried that the US Federal Reserve would keep raising interest rates for longer than previously anticipated. Apple (-4.2%), Microsoft (-2.7%) and Alphabet (-4.1%) shares all slid as US treasury yields climbed. Shares of Qualcomm (-7.7%), Roku (-4.6%) and Fortinet (-13.7%) slumped on weak forecasts. Royal Caribbean Cruises shares rose 8.3% despite mixed results, while Etsy shares jumped 14.3% after
beating revenue estimates. At the close of trade, the Dow Jones index fell by 146.5 points or 0.5%. The S&P 500 index dipped 1.1% and the Nasdaq index fell by 182 points or 1.7%.

US treasuries fell on Thursday (yields higher) a day after US Federal Reserve Chair Jerome Powell said the “ultimate level” of its benchmark policy rate would likely be higher than previously estimated. US 10-year yields rose around 9 points to near 4.15%. And US 2-year yields lifted by around 14 points to near 4.71%.


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Major currencies were weaker against the US dollar in European and US trade. The Euro dipped from highs near US$0.9833 to lows near US$0.9729 and was near US$0.9750 at the US close. The Aussie dollar slipped from highs near US63.70 cents to lows near US62.73 cents and was near US62.95 cents at the US close. And the Japanese yen fell from 147.24 yen per US dollar to JPY148.43 and was near JPY148.25 at US close.

Global oil prices fell by as much as 2% on Thursday as an increase in US interest rates pushed up the US dollar and heightened fears of a global recession that would crimp fuel demand. The Brent crude oil price fell by US$1.49 or 1.5% to US$94.67 a barrel. The US Nymex crude oil price shed US$1.83 or 2.0% to US$88.17 a barrel.

Base metal prices were mixed on Thursday with nickel down 5.7%, copper 0.9% lower and aluminium 0.6% higher.

The gold futures price fell by US$19.10 an ounce or 1.2% to US$1,630.90 an ounce. Spot gold was trading near US$1,631 an ounce at the US close. Iron ore futures rose by US$1.27 a tonne or 1.5% to US$83.37 a tonne.

Originally published by CommSec