ECB hikes by 50 basis points
The ECB kept its promise by hiking 50 basis points despite the current market turmoil surrounding Credit Suisse, and the ECB warned that some banks might come under pressure with increased interest rate hikes. The ECB stated that inflation would be higher for longer. Thus, they had no option other than hiking rates. We have seen the US dollar trading slightly stronger after the press conference indicating that the market believes the Fed can also hike rates next week at its FOMC meeting. Despite the ECB announcement, the Rand had a somewhat uneventful day, drifting between R18.30 and R18.40. It seems that more Creedence will be given to the Fed next week.
Commodity prices tell a story
All commodities, except Gold, are trading in the red this afternoon, which suggests that the fact that central banks are still hiking could impact global growth negatively. Gold is on the front foot due to its safe-haven status in days of "risk-off" trading and is currently trading at $1,930 per ounce. Brent Crude is feeling the possible slowdown in demand and is trading at $72.28 per barrel.
#EuropeanCentralBank #ECB #InterestRate #CreditSuisse
