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European markets open to close, BOE and SNB rate decisions

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U.S. stocks open mixed

U.S. stocks opened mixed Thursday following the Federal Reserve’s decision Wednesday to implement its third consecutive 0.75% interest rate hike.

The Dow Jones Industrial Average and the S&P 500 hovered around the flatline in early deals, while the Nasdaq was down 0.2%.

— Karen Gilchrist

Bank of England raises rates by 50 basis points, in seventh consecutive hike

The Bank of England voted to raise interest rates by 50 basis points, lower than the 75 basis point rise expected by some analysts.

The bank said there had been further signs since August of “continuing strength in domestically generated inflation” but the recent announcement of caps on household and business energy bills would lower consumer price index rises going forward.

The pound was up slightly on the day around the $1.13 mark.

— Jenni Reid

UK regulator to probe cloud market

The U.K.’s media regulator, Ofcom, on Thursday said it will begin an investigation into the dominance of Amazon, Microsoft and Google in the £15 billion public cloud infrastructure market.

Read more here.

The probe will focus on so-called “hyperscalers” like Amazon Web Services and Microsoft Azure, which let businesses access computing power and data storage from remote servers. Collectively, Amazon, Microsoft and Google generate around 81% of revenues in the market, according to Ofcom.

A final report will be published within 12 months detailing any concerns and proposed recommendations, the regulator said, adding that further action could be taken if it finds competition and innovation are being limited in any way.

Over the next year, Ofcom plans to launch additional probes into other digital markets, including personal messaging and virtual assistants.

— Ryan Browne

Bank stocks outperforming other sectors, but gains are marginal

Bank stocks were Europe’s best performers at noon, with the sector up 1.3% since yesterday.

Soaring inflation is prompting the region’s central banks to increase interest rates, bringing in additional profits for the region’s banks.

Pan-European bank Unicredit leads the way with a 6.4% jump in shares after Chief Executive Andrea Orcel announced the bank would raise its guidance for the year during third-quarter results in October.

Spanish banking group Banco Sabadell’s shares are up 5.2% as the organization has entered talks with Worldline, Nexi and Fiserv for a possible payments deal.

Shares of Deutsche Bank followed the trend with a 4.9% increase, after CFO James bon Moltke said the bank would approach 2023 “with caution” at a financial conference.

Finecobank, Commerzbank, Banco BPM Group, Societe Generale and Caixabank are all up by at least 3%.

— Hannah Ward-Glenton

Swiss franc weakens dramatically against dollar, euro and sterling after rate hike

The Swiss franc weakened dramatically against the U.S. dollar, euro and sterling following the central bank’s decision to hike interest rates by 75 basis points to 0.5%.

At 9:30 a.m. London time, the dollar was 0.9% higher against the Swiss currency, while the euro and sterling were both around 1.4% higher against the franc.

Earlier this week, the Swiss franc hit its strongest level against the euro since Jan. 2015, as economists started to speculate about the prospect of a 75 basis points increase.

— Hannah Ward-Glenton

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

Norway’s central bank raised its interest rate to 2.25% from 1.75% and indicated it plans to hike rates further later this year.

There are “clear signs of a cooling economy”, the Norges Bank said in a statement, and “easing pressures in the economy will contribute to curbing inflation further out.”

Based on the monetary policy committee’s current assessment, the policy rate will most likely be raised further in November, according to the bank.

— Hannah Ward-Glenton

Swiss National Bank raises its benchmark interest rate to 0.5%

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

The 75 basis point hike follows an increase to -0.25% on June 16, which was the first rate rise in 15 years. Prior to this, the Swiss central bank had held rates steady at -0.75% since 2015.

Inflation in Switzerland is currently running at its highest rate in three decades, reaching 3.5% last month.

— Hannah Ward-Glenton

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

Italy’s 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 comes to pass, it will mark a massive political shift for a country already dealing with ongoing economic and political instability.

Polls prior to Sept. 9 (when a blackout period began) showed a right-wing coalition easily winning a majority of the seats in the slimmed-down lower and upper houses of parliament.

Atmosphere during Giorgia Meloni’s rally in Cagliari to launch her campaign for Italy’s next general election at Cagliari on September 02, 2022 in Cagliari, Italy. Italians head to the polls for general elections on September 25, 2022.

Emanuele Perrone | Getty Images News | Getty Images

The coalition is led by Giorgia Meloni’s far-right Fratelli d’Italia (Brothers of Italy), and includes three other right-leaning parties: Lega, under Matteo Salvini, Silvio Berlusconi’s Forza Italia and a more minor coalition partner, Noi Moderati.

The Brothers of Italy party stands out from the crowd and is expected to gain the largest share of the vote for a single party. It’s seen getting almost 25% of the vote, according to poll…

Read More: European markets open to close, BOE and SNB rate decisions

2022-09-22 15:09:00

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