- Second week of losses for stocks around the world were recorded as Fed policymakers revealed expectations of rise in short-term interest rates in coming months; Along with the sharp increase in interest rates, European shares fell for the second consecutive week
- Comparing with the previous week, the EURO STOXX 50 Index was down 4.3% to 3,348.60 points, the DAX Index was down 3.6% to 12,284.19 points, and the SMI Index was down 4.5% at 10,137.78 points
- All eyes were on the Fed policy meeting held on Wednesday with the meeting concluding with its third consecutive 75-basis-point hike rate, bringing it to a target range of 3.25%, its highest since March 2008; The delivery of yet another super-sized hike by the hawkish Fed has impacted Europe, leading to the fall of many European stock index futures on Thursday shortly after announcement; Bank of England hiked interest rates by 50 bps to 2.25%, the Swiss National Bank raised interest rates by 75 bps to 0.5%, and Norway raised by 50 bps to 2.25%
- Britain’s new finance minister Kwasi Kwarteng unleased historical tax cuts and huge borrowing increases on Friday that sent sterling and British government bonds into a freefall; Investors dumped short-dated British government bonds immediately as the cost of borrowing over five years saw its biggest one-day rise since 1991; Pound slumped more then 3% against the dollar to new 37-year low against dollar
- Bond yields from multiple Eurozone countries hit record highs; German 2-year yield reached 10 bps higher at 1.858% and 10-year yield hit 1.991%, highest since 2014; Italy’s 10-year yield also rose 6bps to 4.191%
- In times of uncertainty, the Eurex Micro Product Suite remains an avenue for investors to take an opinion on the European markets as orderbook spread and depth remain attractive throughout the day; Over 6.4 million contracts have been traded (YTD), ensuring investors can continue to capture opportunities.
Learn more: https://www.eurex.com/ex-en/markets/idx/micro-product-suite
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