Markets

Global shares fall on Fed rate hike, UK rate outlook

Global shares fall on Fed rate hike, UK rate outlook

The dollar climbed to two-week highs against other major currencies on Thursday, as a string of upbeat US data and the Federal Reserve's decision to raise interest rates continued to support. US yields dropped across the curve on Wednesday and the spread between two and ten-year yields shrank to the lowest levels in over a year.

After gaining support from weak USA data on Wednesday, there was a sharp reversal after the firm Fed policy statement as the dollar gained renewed support.

The rate setting committee of U.S central bank said that the economy had continued to strengthen and job gains have remained solid, which has indicated its views on recent consistency in inflation as largely transitory.

The Bank also outlined its plan of reducing its balance sheet, which it expanded by buying bonds and other securities in order to tackle the housing crisis leading up to the great USA financial meltdown in 2008.

Federal Reserve Board Chairwoman Janet Yellen arrives at a news conference following a meeting of the Federal Open Market Committee June 14, 2017 in Washington, DC.

"The committee now expects to begin implementing a balance sheet normalisation programme this year, provided that the economy evolves broadly as anticipated". The Swissy has reclaimed its broken bullish trend line, so it will be interesting to see if it will be able to climb back towards the top of its range again given the renewed hawkishness from the Fed.

ASIA'S DAY: Japan's Nikkei 225 stock index fell 0.3 percent to 19,831.82 and South Korea's Kospi sank 0.5 percent to 2,361.65.

The average 30-year fixed mortgage has a rate of 4.02 percent, the lowest since November 16, 2016, and an average of 0.24 discount and origination points. The S&P ASX 200 in Australia tumbled 1.2 percent to 5,761.00.

Therefore, the worst is yet to come for the world economy if the USA keeps the current tempo of financial policy tightening or even accelerates it. The blue-chip CSI300 index fell 0.2 percent while the Shanghai Composite Index added 0.1 percent.

The Federal Reserve raised the rate previously in March 2017 to 0.75-1 percent per annum and then kept it at the same level in May. Financial markets will take it in stride.

CURRENCIES: The dollar rose to 109.75 from 109.57 yen.

The move registered swiftly in markets, with the territory's one-month interbank rate, known as HIBOR, jumping the most in six months, and a gauge of property stocks in Hong Kong retreating more than 1 percent.

The relatively firm Federal Reserve statement from Wednesday and an unexpected 5-3 Bank of England vote to hold interest rates at 0.25% had some impact in shifting expectations surrounding global central bank policies with a slightly more hawkish slant than had been priced in.

Euro zone government bond yields edged up in early trade.


  • Takata To Go Belly Up As Early As Next Week

    Takata To Go Belly Up As Early As Next Week

    This filing could arrive in the coming week both in Japan and the U.S. , where it has a subsidiary and is looking for a buyer. Takata has already paid a $25 million fine and $125 million to a victims' compensation fund, including for future incidents.

    Aisha Tyler leaving 'The Talk' after six seasons

    After her surprising announcement, Aisha Tyler posted two poignant messages to social media. The Talk airs on CBS weekdays at 2 p.m.
    Aston Martin rolls out Vantage-based AMR special editions

    Aston Martin rolls out Vantage-based AMR special editions

    Only 200 V8 models and 100 V12s will reach production, with prices starting at £97,995 for an eight-cylinder example. The current Vantage flagship costs $354,300 for the V12 Vantage S Coupe or $254,200 for the equivalent V8.
  • Jerry West leaving Warriors, hired as Clippers consultant

    I've kind of been defiant my whole life, the way I was raised and I think this is like the defiant streak in me, I don't know". Reports state that West will play an important role with the Los Angeles Clippers in retaining their free agents.
    Leeds United Set To Appoint Former APOEL Coach As New Manager

    Leeds United Set To Appoint Former APOEL Coach As New Manager

    Leeds United have appointed former Spain global Thomas Christiansen as their new head coach, the club have confirmed. He represented La Roja at Under-21 level before winning two senior caps, scoring once.

    Uber Loses Top Executive As Its CEO Ponders A Leave Of Absence

    Kalanick proposed taking time off last month after a boating accident that killed his mother and sent his father to the hospital. On the agenda at Sunday's meeting were a possible leave of absence for Mr Kalanick and potentially parting ways with Mr Michael.
  • Father's Day is an opportunity to ask Dad about his health

    Father's Day is an opportunity to ask Dad about his health

    He worked at the same company as a printer from about the age of 21 through 60, until he claimed disability for failing eye sight. Well things have changed as with the men are helping more with cooking so the working wife won't have to do quite as much.
    Netflix Voices Support for Net Neutrality After CEO Flip Flop

    Netflix Voices Support for Net Neutrality After CEO Flip Flop

    Ironically, Netflix would actually have more to gain if current FCC Chairman Ajit Pai completely reverses net neutrality. Netflix's participation is notable because it represents a bit of a of change of heart for the company.
    India vs Pakistan: Hardik Pandya ending the all-rounder conversation in style

    India vs Pakistan: Hardik Pandya ending the all-rounder conversation in style

    Indian bowlers took nine Pakistan wickets for 164 runs to complete the win as Wahab Riaz did not come out to bat. Earlier, India posted a mammoth 319 in 48 overs, courtesy a solid opening stand and then a late burst.
  • Historic Triangle picks Gillespie, Northam in gubernatorial primary

    Historic Triangle picks Gillespie, Northam in gubernatorial primary

    Ralph Northam over a liberal insurgent who sought to portray his candidacy as the tip of the spear of the anti-Trump resistance. Virginia race is receiving national attention as it is one of only two states with governor offices up for election this year.
    Qatar Airways profits $540 million, braces for Gulf crisis

    Qatar Airways profits $540 million, braces for Gulf crisis

    A Qatari businessman is to airlift 4,000 to the Gulf state amid a blockade by rival Sunni countries. Making life more uncomfortable for Qatar is Donald Trump's open support for the other side.
    Halep to Meet Ostapenko for Roland Garros Title

    Halep to Meet Ostapenko for Roland Garros Title

    But the Latvian took the challenge to Bacsinszky with her aggression, nipping ahead at 4-3 before the Swiss called for the trainer.