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US and European stocks tick higher after central banks tighten monetary policy

U.S. and European stocks rose sadly on Thursday, following sharp gains in the previous session, as traders weighed on developments in Ukraine and central bank moves to tighten monetary policy.

Wall Street’s widely based S&P 500 stock, which Closed more than 2 percent On Wednesday, it rose 0.8 percent by mid-afternoon in New York. The high-tech Nasdaq Composite added 0.8%.

In Europe, the regional Stoxx 600 index closed up 0.4% after rising 3.1% in the previous session. The London FTSE 100 rose 1.3%.

These moves came after the Bank of England Raise credit costs On Thursday. The BoE’s policy move follows a rise in interest rates by the Federal Reserve the day before, the first rise since the US Federal Reserve lowered interest rates to zero at the start of the epidemic.

The BoE’s Monetary Policy Committee voted eight to one to raise the interest rate by 0.25 percentage points to 0.75% and predicted that inflation is expected to reach 8% by the end of June.

Following the decision, the 10-year UK Gold return fell 0.07 percentage points to 1.56%, while the two-year discount returned 0.12 percentage points to 1.27%. Bond yields are upside down in price.

Charles Hall, head of research at investment bank Peel Hunt, said the BoE’s inflation forecast looked optimistic, given that food and energy prices could rise higher if the war in Ukraine lasted months. “A lot of this inflation is driven by supply, but it should have been seen that the bank is doing something. [The interest rate rise] He’s pretty much in the middle of the road, there were no fireworks today, “he said.

The Fed on Wednesday Raise the principal interest rate By a quarter of a percentage point, in line with market expectations, in a move designed to address rising inflation that is expected to provoke even more from Russia’s invasion of Ukraine.

The Fed’s initial rate hike was “a little lukewarm” and unlikely to do much to bring inflation down, said Joost van Landers, senior portfolio manager at Kempen Capital Management.

“The most important signal” was the central bank indicating that interest rates would climb in each of its next six policy meetings this year, he said, “which shows they are serious about tackling the inflation problem.”

The yield on the 10-year U.S. Treasury bill was nearly fixed on Thursday afternoon at 2.18 percent after briefly touching a nearly three-year high the previous day.

In the Asia-Pacific stock markets, Chinese stocks rose to Monday, after Beijing pledged to take steps to support the economy. Hong Kong’s Hang Seng Index jumped 7%, while the Shanghai and Shenzhen CSI 300 shares rose almost 2%.

China’s Financial Stability and Development Committee was Promised “significant steps” On Wednesday to bolster growth and mark other supportive actions. Concerns about the country’s growth forecast sparked double-digit falls earlier this week.

“Policymakers are likely to walk away,” said Xiangrong Yu, China’s chief economist at Citigroup. Hugh pointed to statements from a variety of leading institutions, including the People’s Bank of China and the regulator on banks and insurance, all of which have pledged to take the new steps.

But Hugh added that there were “significant growth spirits”, including signs of weakness from China’s asset market and an increase in Cubid-19 cases.

In commodity markets, Brent crude prices rose 8.8 percent to $ 106.64 a barrel. The international oil index approached $ 140 a barrel earlier this month before a sharp drop.

US and European stocks tick higher after central banks tighten monetary policy Source link US and European stocks tick higher after central banks tighten monetary policy

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