European markets open for closing, stocks, news, data and earnings
New British Prime Minister Liz Truss announces a cap on energy bills to combat the cost of living crisis
UK Prime Minister Liz Truss announced a stimulus package to help Britons with sky-high energy bills.
Truss said the typical household “will pay no more than £2,500 ($2,880) per year for each of the next two years,” which the Prime Minister added would give the average household “a £1,000 saving per year.”
Before the announcement, energy bills for Britons were set to reach £3,549 a year from October 1, up from £1,971.
The stimulus package comes as more than 1[ads1]80,000 people in the UK have pledged to cancel their energy bills on October 1 in protest against rising energy prices.
—Hannah Ward-Glenton
The euro rises ahead of the ECB’s interest rate decision
The euro moved higher against the US dollar and British pound as investors await the ECB’s interest rate hike announcement.
The euro was trading up 0.1% at $1.0015 around midday in London. On Monday, the shared currency fell below 99 cents for the first time in 20 years amid energy security fears.
Pound woes continue ahead of UK energy bailout announcement
Questions about the stimulus package’s impact on Britain’s growth and net debt have combined with ongoing dollar strength amid market volatility.
The euro was up 0.24% against the pound at 0.8639 ahead of the ECB announcement, but down 0.17% against the dollar at 0.9986.
– Jenny Reid
European shares start the day higher
Most sectors were trading higher early Thursday, as energy security continued to dominate headlines and investors await a decision on rate hikes from the European Central Bank.
Only retail stocks saw a significant drop in early trade, losing 1.67%. Oil and gas businesses rose 0.14% after leading Wednesday’s losses.
British biotech company Genus was the biggest gainer, up 7.9%, after posting higher profits in full-year results.
At the other end of the scale, French IT firm and consultancy Atos fell 12.75%.
– Jenny Reid
The European Central Bank could trigger a jumbo interest rate hike as the economy heads into recession
The European Central Bank is expected to accelerate a series of rate hikes and sacrifice growth in the region due to the rising cost of living which threatens to rise even higher.
ECB Executive Board member Isabel Schnabel’s speech in Jackson Hole set the tone for the upcoming policy meeting this week. With eurozone inflation forecast to rise to at least 10% in the coming months and the risk of consumer prices soaring higher, a “jumbo” rate hike of 75 basis points on Thursday is certainly a possibility.
“As front-loaded hikes may have a greater impact on inflation expectations than a more gradual approach, a 75bp move may make sense,” ECB watchdog and Berenberg chief economist Holger Schmieding said in a research note.
Read the whole story here: The European Central Bank could trigger a jumbo rate hike as the economy slides into recession
—Holly Ellyatt
US dollar has legs to move even higher, Wells Fargo strategist says
The US dollar has room to move higher thanks to interest rate differentials on the back of a hawkish Federal Reserve, according to Wells Fargo Securities FX strategist Brendan McKenna.
“We think many of these international banks will not be able to raise interest rates as aggressively as the markets have priced in,” he told CNBC’s “Squawk Box Asia.”
“So it’s kind of a combination of a more hawkish Fed and a less hawkish tightening cycle from these international central banks supporting the dollar for the rest of this year,” he said.
– Jihye Lee
Goldman Sachs raises the Fed’s forecasts for hikes for this year
Goldman Sachs revised its forecasts for upcoming interest rate decisions from the Federal Reserve.
Analysts led by chief economist Jan Hatzius said in a note that the firm expects a rise of 75 basis points in September, up from a previous forecast of 50 basis points, as well as a rise of 50 basis points in November, also revised from a previous estimate of 25 basis points.
It also expects a 25 basis point hike in December – citing officials’ recent hawkish commentary.
The note said Fed officials “have appeared to suggest that progress toward taming inflation has not been as steady or as rapid as they would like,” the note said.
– Jihye Lee
CNBC Pro: The Wall Street pro predicts when the S&P 500 will rally — and reveals how to trade it
Market volatility is here to stay, according to market veteran Phil Blancato.
But the president and CEO of Ladenburg Thalmann Asset Management sees a “strong rally” on the cards as market conditions improve.
He predicts when the rally will take place and lists his top picks for trading the volatility.
Pro subscribers can read more here.
— Zavier Ong
All major averages edge higher, Nasdaq snaps 7-day losing streak
Stocks rose on Wednesday as Wall Street looked past concerns about aggressive rate hikes by the Federal Reserve.
The Dow Jones Industrial Average rose 435.98 points, or 1.40%, to end the day at 31,581.28. The S&P 500 rose 1.83% to 3,979.90 and the Nasdaq Composite rose 2.14% to 11,791.90, snapping a seven-day losing streak.
—Carmen Reinicke
European markets: Here are the opening calls
European shares are expected to open cautiously higher on Wednesday with Britain’s FTSE index set 18 points higher at 7,560, Germany’s DAX 33 points higher at 13,944, France’s CAC 40 up 18 points at 6,616 and Italy’s FTSE MIB up 42 points at 2029, according to data from IG.
Data releases include preliminary unemployment data for the eurozone for the second quarter as well as gross domestic product for the second quarter. The latest UK inflation figures for July will be released alongside provisional Dutch GDP for the second quarter.
The income comes from Uniper, Carlsberg, Persimmon, Balfour Beatty, BAT and National Grid.
