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European markets open to close, BOE and SNB rate decisions

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European markets open to close, BOE and SNB rate decisions


Swiss franc weakens dramatically against dollar, euro and sterling after rate hike

The Swiss franc weakened dramatically against the US dollar, euro and sterling following the central bank’s decision to hike interest rates by 75 basis points to 0.5%.

At 9:30 am London time, the dollar was 0.9% higher against the Swiss currency, while the euro and sterling were both around 1.4% higher against the franc.

Earlier this week, the Swiss franc hit its strongest level against the euro since Jan. 2015, as economists began to speculate about the prospect of a 75 basis points increase.

— Hannah Ward-Glenton

Norway’s central bank hikes benchmark interest rate to 2.25%

Norway’s central bank raised its interest rate to 2.25% from 1.75% and indicated it plans to hike rates further later this year.

There are “clear signs of a cooling economy”, the Norges Bank said in a statement, and “easing pressures in the economy will contribute to curbing inflation further out.”

Based on the monetary policy committee’s current assessment, the policy rate will most likely be raised further in November, according to the bank.

— Hannah Ward-Glenton

Swiss National Bank raises its benchmark interest rate to 0.5%

The Swiss National Bank raised its benchmark interest rate to 0.5%, a shift that brings an end to an era of negative rates in Europe.

The 75 basis point hike follows an increase to -0.25% on June 16, which was the first rate rise in 15 years. Prior to this, the Swiss central bank had held rates steady at -0.75% since 2015.

Inflation in Switzerland is currently running at its highest rate in three decades, reaching 3.5% last month.

— Hannah Ward-Glenton

Italy heads to the polls on Sunday, here’s what to expect

Italy’s voters head to the polls on Sunday in a snap general election that is likely to see a government led by a far-right party come to power.

If that comes to pass, it will mark a massive political shift for a country already dealing with ongoing economic and political instability.

Polls prior to Sept. 9 (when a blackout period began) showed a right-wing coalition easily winning a majority of the seats in the slimmed-down lower and upper houses of parliament.

Atmosphere during Giorgia Meloni’s rally in Cagliari to launch her campaign for Italy’s next general election at Cagliari on September 02, 2022 in Cagliari, Italy. Italians head to the polls for general elections on September 25, 2022.

Emanuele Perrone | Getty Images News | Getty Images

The coalition is led by Giorgia Meloni’s far-right Fratelli d’Italia (Brothers of Italy), and includes three other right-leaning parties: Lega, under Matteo Salvini, Silvio Berlusconi’s Forza Italia and a more minor coalition partner, Noi Moderati.

The Brothers of Italy party stands out from the crowd and is expected to gain the largest share of the vote for a single party. It’s seen getting almost 25% of the vote, according to poll aggregator Politiche 2022, far ahead of its nearest right-wing ally Lega, which is expected to get around 12% of the vote.

Read more on the upcoming election here

— Holly Elliott

Market open: Fortum up 4%, Accor down 6%

Shares of Fortum rose again in early trade Thursday after the Finnish company agreed to sell its 56% stake in German utility Uniper to the German government. The state-owned energy company shifted its stake in a nationalization deal.

French hospitality company Accor saw its shares fall 6.3% at market open after JP Morgan cut its rating on the stock from neutral to underweight. The investment bank expressed concerns the group would not be able to return to its previous level of profitability, saying “our concerns have now exceeded the reasons we like it.”

— Hannah Ward-Glenton

Credit Suisse plans to split its investment bank into three: The FT

Credit Suisse has plans to split its investment bank into three, according to the Financial Times.

The Swiss lender wants to have a separate “bad bank” exclusively for risky assets as it recovers from several years’ worth of scandals and blunders.

New proposals suggest Credit Suisse will sell some of its profitable units as part of the radical reshuffle, with full plans expected to be announced at the bank’s third-quarter results on Oct. 27, the FT reported.

— Hannah Ward-Glenton

Oil prices climb after Fed’s rate hikes, demand fears linger

Oil prices climbed following the Fed’s third consecutive rate hike.

Reuters also reported Chinese refiners are expecting the nation to release up to 15 million tonnes worth of oil products export quotas for the rest of the year, citing people with knowledge of the matter.

Brent crude futures rose 0.45% to stand at $90.24 per barrel, while US West Texas Intermediate also gained 0.45% to $83.3 per barrel.

— Lee Ying Shan

Fed hike likely to keep Asian risk assets under pressure, JPMorgan says

Asian risk assets, especially export-oriented companies, will remain under pressure in the short term following the Fed’s rate hike, according to Tai Hui, chief APAC market strategist at JPMorgan Asset Management.

Tai added that a strong US dollar is likely to persist, but tightening monetary policy in most Asian central banks — with the exception of China and Japan — should help limit the extent of Asian currency depreciation.

The US dollar index, which tracks the greenback against a basket of its peers, strengthened sharply and last stood at 111.697.

— Abigail Ng

CNBC Pro: This fund manager is beating the market. Here’s what he’s betting against

Stock markets are down but the fund managed by Patrick Armstrong at Plurimi Wealth is continuing to deliver positive returns. The fund manager has a number of short positions to play the market volatility.

Pro subscribers can read more here.

— Zavier Ong

CNBC Pro: Morgan Stanley’s Mike Wilson names the key attribute he likes in stocks

Morgan Stanley’s Mike Wilson is staying defensive amid the persistent market volatility this year. He names the key attribute he’s looking for in stocks.

Stocks with this attribute have been “rewarded” this year, with the trend likely to persist until the market turns more bullish, according to Wilson.

Pro subscribers can read more here.

— Zavier Ong

European markets: Here are the opening calls

European stocks are expected to open in negative territory on Wednesday as investors react to the latest US inflation data.

The UK’s FTSE index is expected to open 47 points lower at 7,341, Germany’s DAX 86 points lower at 13,106, France’s CAC 40 down 28 points and Italy’s FTSE MIB 132 points lower at 22,010, according to data from IG.

Global markets have pulled back following a higher-than-expected US consumer price index report for August which showed prices rose by 0.1% for the month and 8.3% annually in August, the Bureau of Labor Statistics reported Tuesday, defying economist expectations that headline inflation would fall 0.1% month-on-month.

Core CPI, which excludes volatile food and energy costs, climbed 0.6% from July and 6.3% from August 2021.

UK inflation figures for August are due and euro zone industrial production for July will be published.

— Holly Elliott

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