Higher stock markets showed the bulls were still firmly in charge on Thursday as the European Central Bank and Bank of England followed the U.S. Federal Reserve in extending one of fastest rise in global interest rates on record.
Despite the harmony of hikes, traders were holding on to the view that slowing economies would probably lead the heavyweights in the central banking ring to rein in the punches.
Fed chair Jerome Powell’s message on Wednesday after its quarer point hike that a “disinflationary” process was taking hold kept both European shares and Wall Street pointing higher , and the dollar near a 10-month low. /FRX
The BoE’s policymakers had then raised Britain’s rates by 50 basis points with a thumping 7-2 majority. The ECB matched the move and signalled it would be another 50 bps next month too.
The usual post-decision action was lacking as the euro barely moved at just under $1.10.
The pound was a groggy 0.5% lower after the BoE raise, although the parallel drop in bond market borrowing costs left the gap between U.S. and German 10-year yields at its smallest since September 2020.
This report’s information was first seen on REUTERS; to read more, click this link.
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