Global stocks fall on interest rate concerns; Oil prices are also dropping

The US Federal Reserve building is seen in a previous warning tape in Washington, DC, on September 19, 2022. – Stock markets fluctuated after last week’s rout as investors anticipate another massive rate hike by the US Federal Reserve that they fear will lead to a global economic downturn. (Photo by Stephanie Reynolds/AFP)

by Roland Jackson
France media agency

New York, United States (AFP) – Stocks fell Tuesday as investors awaited the US Federal Reserve’s announcement on the next rate hike, with an increase also expected this week from the Bank of England, as both countries aim to tackle rising inflation. .

Meanwhile, Sweden’s central bank unveiled its biggest rise in three decades earlier in the day, raising its policy rate by a full percentage point to 1.75 percent.

Wall Street has been turbulent in recent days due to hawkish rhetoric from central bankers, with the Federal Reserve expected to raise its key interest rate by another 0.75 percentage points. The three major US indexes lost about one percent on the eve of the announcement.

The Federal Reserve’s Federal Open Market Committee (FOMC) is due to announce its decision at 1600 GMT on Wednesday.

The announcement was the main focus for the markets after figures last week showed that consumer prices are still rising at a pace not seen since the early 1980s.

“Right now, the market is waiting and seeing the situation and it is waiting to see what happens from the Fed,” said Adam Sarhan of 50 Park Investments.

Then investors wait to see how the markets will react to this news. So at this point, it’s all about global central banks.”

Stocks in Frankfurt ended the day 1.0% lower as news of a skyrocketing German producer price heightened inflation fears, and the government looked set to nationalize energy company Uniper, which has been dented by rising gas prices.

London fell after reopening following Queen Elizabeth II’s funeral on Monday.

The US dollar rose against the major currencies while oil prices fell.

sure peace dunk –
On Thursday, the Bank of England (BoE) is expected to provide another significant increase in Britain’s borrowing costs.

“The (Swedish) rally highlighted how seriously central banks are taking the risk of inflation, and with the BoE and Federal Reserve up 75 basis points looking like an extreme certainty, the early optimism in the markets quickly evaporated,” the markets said. Com analyst Neil Wilson told AFP.

“The reality of central bank tightening… keeps a lid on equities and will continue to be a risk headwind.”

NEW YORK, NY – SEPTEMBER 16: Traders work on the floor of the New York Stock Exchange (NYSE) on September 16, 2022 in New York City. The Dow Jones Industrial Average fell again on Friday as economic concerns over inflation and global corporate earnings for carriers eased. Spencer Platt/Getty Images/AFP (Photo by Spencer Platt/Getty Images North America/Getty Images via AFP)

Sentiment on Wall Street was also dampened by data showing a decline in home building permits, despite home building increasing 12.2 percent month-on-month in August.

Meanwhile, Asian markets enjoyed a much-needed rally on Tuesday, tracking Wall Street’s rally late Monday.

Elsewhere on Tuesday, the British pound remained under pressure, even as the Bank of England raised interest rates again, having slipped on Friday to a 1985 low of $1.1351.

Oil prices continued their downward trend.

“A strong dollar, higher yields and demand concerns as the global economic slowdown weighs on crude oil prices once again,” said Michael Hewson, market analyst at CMC Markets.

– Key numbers around 2030 GMT –
New York – Dow: down 1.0 percent at 30,706.23 (close)

New York – S&P 500: down 1.1% at 3,855.93 (close)

New York – Nasdaq: down 1.0 percent at 11425.05 (close)

EURO STOXX 50: down 0.9% at 3467.09 (close)

London – FTSE 100: down 0.6 per cent at 7,192.66 (close)

Frankfurt – DAX: down 1.0 percent at 12670.83 (close)

Paris – CAC 40: down 1.4 percent at 5979.47 (close)

TOKYO – Nikkei 225: up 0.4 percent at 27688.42 (close)

Hong Kong – Hang Seng Index: up 1.2 percent at 18,781.42 (close)

Shanghai – Composite: up 0.2% at 3122.41 (close)

EUR/USD: down at $0.9977 from $1.0024 on Monday

Dollar / yen: rose to 143.7240 yen from 143.21 yen

Pound/dollar: down at $1.1384 from $1.1431

EUR/GBP: DOWN at 87.63 pence from 87.70 pence

Brent North Sea crude: down 1.5 percent at $90.62 a barrel

West Texas Intermediate: down 1.5% at $84.45 a barrel


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