European markets are falling as investors digest more interest rate hikes

The Swiss franc weakened significantly against the dollar, the euro and the pound after the interest rate hike

The Swiss franc weakened significantly against the US dollar, the euro and the British pound after the central bank’s decision to raise interest rates by 75 basis points to 0.5%.

At 9:30 AM London time, the dollar was up 0.9% against the Swiss currency, while the euro and the British pound were up about 1.4% against the franc.

Earlier this week, the Swiss franc reached its strongest level against the euro since January 2015, as economists began speculating about a possible 75 basis point increase.

– Hannah Ward Glinton

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

The Norges Bank raised the interest rate to 2.25% from 1.75% and indicated that it plans to raise rates further later this year.

Norway’s central bank said in a statement that there were “clear signs of a slowing economy”, and “relieving pressures in the economy will further curb inflation.”

Based on the MPC’s current assessment, the policy rate is likely to be raised further in November, according to the bank.

– Hannah Ward Glinton

Swiss National Bank raises benchmark interest rate to 0.5%

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

The 75 basis point rise followed a -0.25% increase on June 16, which was the first rate increase in 15 years. Prior to that, the Swiss Central Bank had kept interest rates steady at -0.75% since 2015.

Switzerland’s inflation rate is currently at its highest rate in three decades, reaching 3.5% last month.

– Hannah Ward Glinton

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

Italian 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 happens, it would constitute a massive political shift for a country already dealing with ongoing economic and political instability.

Opinion polls prior to September 9 (when the blackout period began) showed that a right-wing coalition easily won a majority of seats in the reduced House and Senate.

Air during Giorgia Meloni’s rally in Cagliari to launch her campaign for Italy’s next general election in Cagliari on September 2, 2022 in Cagliari, Italy. Italians head to the polls for the general election on September 25, 2022.

Emmanuel Peroni | Getty Images News | Getty Images

The alliance is led by the far-right Fratelli d’Italia led by Giorgia Meloni (Brothers of Italy), and includes three other right-wing parties: Lega, led by Matteo Salvini, Forza Italia led by Silvio Berlusconi, and a secondary coalition partner, Noe Modrati.

The Brothers of Italy party stands out from the crowd and is expected to get the largest share of votes for one party. It is expected to receive nearly 25% of the vote, according to polling compiler Politiche 2022, far ahead of its closest right-wing ally Lega, which is expected to receive around 12% of the vote.

Read more about the upcoming elections here

– Holly Eliat

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

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

French hospitality company Accor saw its shares fall 6.3% at the market open after JP Morgan lowered its rating on the stock from neutral to underweight. The investment bank expressed concerns that the group would not be able to return to its previous level of profitability, saying, “Our fears now exceed the reasons we love.”

– Hannah Ward Glinton

Credit Suisse plans to split its investment bank into three: Financial Times

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

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

New proposals suggest Credit Suisse will sell some of its profitable units as part of the radical adjustment, and full plans are expected to be announced in the bank’s third-quarter results on October 27, the Financial Times reports.

– Hannah Ward Glinton

Oil prices rise after Fed raises rates, demand concerns remain

Oil prices rose after the third consecutive rate hike by the Federal Reserve.

Reuters also reported that Chinese refiners expect the nation to export up to 15 million tons of oil product export quotas for the rest of the year, citing people familiar with the matter.

Brent crude futures rose 0.45% to $90.24 a barrel, while Brent crude futures rose 0.45% to $83.3 a barrel.

– Lee Ying Shan

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

Asian risk assets, especially export-oriented companies, will remain under pressure in the short term after the Federal Reserve raises interest rates, according to Tai Hui, chief market strategist for Asia Pacific at JPMorgan Asset Management.

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

The US dollar index, which measures the greenback against a basket of its peers, rose sharply and last settled at 111,697.

– Abigail

CNBC Pro: This fund manager is outperforming the market. This is what he is betting on

Stock markets are down but the fund managed by Patrick Armstrong at Plurimi Wealth continues to generate positive returns. The fund manager owns a number of short positions to deal with market volatility.

Professional subscribers can read more here.

– Xavier Ong

CNBC Pro: Morgan Stanley’s Mike Wilson names the key feature he loves about stocks

Morgan Stanley’s Mike Wilson remains on the defensive amid ongoing market volatility this year. Names the main feature he looks for in a stock.

Stocks with this trait have been “rewarded” this year, and the trend will likely continue until the market turns more bullish, according to Wilson.

Professional subscribers can read more here.

– Xavier Ong

European Markets: Here are the opening calls

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

The UK FTSE is expected to fall 47 points at 7341, the German DAX 86 is down at 13106, the French CAC 40 is down 28 points, and the Italian FTSE MIB is down 132 points at 22010, according to data from IG.

Global markets fell after a higher-than-expected US Consumer Price Index report for August showed prices rising 0.1% for the month and 8.3% annually in August, the Bureau of Labor Statistics reported Tuesday, defying economists’ expectations that core inflation. It will decrease 0.1% on a monthly basis.

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

UK inflation figures are due for August, and Eurozone industrial production for July will be published.

– Holly Eliat

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