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| Version 19 | Version 20 |
|---|---|
| Fed interest rate hike: Wall Street dip curtails celebrations - as it happened | Fed interest rate hike: Wall Street dip curtails celebrations - as it happened |
| (about 21 hours later) | |
| 5.53pm GMT | 5.53pm GMT |
| 17:53 | 17:53 |
| Helena Smith | Helena Smith |
| Over in Athens there has been some commotion this afternoon between Greece and its creditors. Our correspondent Helena Smith reports: | Over in Athens there has been some commotion this afternoon between Greece and its creditors. Our correspondent Helena Smith reports: |
| In a highly embarrassing move, the leftist-led government has had to withdraw its much-touted “parallel economic program” - outlining measures to ease the debt-stricken country’s humanitarian crisis – under threat of having its next aid disbursement withheld. The program had been central to prime minister Alexis Tsipras’ promise that while his government had been forced to swallow the bitter pill of austerity – the price of being bailed out to the tune of €86bn this summer - harsh reforms would be offset with assistance for the most needy. | In a highly embarrassing move, the leftist-led government has had to withdraw its much-touted “parallel economic program” - outlining measures to ease the debt-stricken country’s humanitarian crisis – under threat of having its next aid disbursement withheld. The program had been central to prime minister Alexis Tsipras’ promise that while his government had been forced to swallow the bitter pill of austerity – the price of being bailed out to the tune of €86bn this summer - harsh reforms would be offset with assistance for the most needy. |
| Almost immediately there was uproar. | Almost immediately there was uproar. |
| Zoe Konstantopoulou, parliament’s erstwhile president, one of 25 MPs who broke away from Tsipras’ Syriza party this year, tweeted that Greece had a “puppet government” that was “dancing to the tune of lenders.” Others said it was yet another example of the leftist-led coalition being boxed into a corner. | Zoe Konstantopoulou, parliament’s erstwhile president, one of 25 MPs who broke away from Tsipras’ Syriza party this year, tweeted that Greece had a “puppet government” that was “dancing to the tune of lenders.” Others said it was yet another example of the leftist-led coalition being boxed into a corner. |
| Eurozone officials, who provisionally approved the €1bn aid instalment after the social measures were rescinded, said the funding would likely be disbursed Friday night. The disputed program would be reviewed in early January, they said, clarifying that Greece had failed to inform lenders of the cost of such measures. | Eurozone officials, who provisionally approved the €1bn aid instalment after the social measures were rescinded, said the funding would likely be disbursed Friday night. The disputed program would be reviewed in early January, they said, clarifying that Greece had failed to inform lenders of the cost of such measures. |
| On that note, we’ll close for the evening. Thanks for all your comments, and we’ll be back tomorrow. | On that note, we’ll close for the evening. Thanks for all your comments, and we’ll be back tomorrow. |
| 4.58pm GMT | 4.58pm GMT |
| 16:58 | 16:58 |
| European shares close higher after Fed rate rise | European shares close higher after Fed rate rise |
| With the Federal Reserve removing the uncertainty clouding markets by finally raising US interest rates, European markets responded favourably to the news. But an opening fall on Wall Street - which had surged in the immediate aftermath of Wednesday’s Fed move - took some of the shine off, and European shares ended off their best levels. The rise in the US dollar following the announcement of dearer borrowing costs hit commodity prices, with Brent crude down 0.5%, and left energy shares lower. The closing scores showed: | With the Federal Reserve removing the uncertainty clouding markets by finally raising US interest rates, European markets responded favourably to the news. But an opening fall on Wall Street - which had surged in the immediate aftermath of Wednesday’s Fed move - took some of the shine off, and European shares ended off their best levels. The rise in the US dollar following the announcement of dearer borrowing costs hit commodity prices, with Brent crude down 0.5%, and left energy shares lower. The closing scores showed: |
| On Wall Street, the Dow Jones Industrial Average is currently down 130 points or 0.7%. | On Wall Street, the Dow Jones Industrial Average is currently down 130 points or 0.7%. |
| 3.58pm GMT | 3.58pm GMT |
| 15:58 | 15:58 |
| The IMF has commented on the Christine Lagarde situation: | The IMF has commented on the Christine Lagarde situation: |
| IMF Communications Director Gerry Rice:“As we have said before, it would not be appropriate to comment on a case that has been and is currently before the French judiciary. However, the Executive Board continues to express its confidence in the Managing Director’s ability to effectively carry out her duties. The Board will continue to be briefed on this matter.” | IMF Communications Director Gerry Rice:“As we have said before, it would not be appropriate to comment on a case that has been and is currently before the French judiciary. However, the Executive Board continues to express its confidence in the Managing Director’s ability to effectively carry out her duties. The Board will continue to be briefed on this matter.” |
| 3.52pm GMT | 3.52pm GMT |
| 15:52 | 15:52 |
| Here’s the early take on Christine Lagarde facing trial: | Here’s the early take on Christine Lagarde facing trial: |
| Related: IMF head Lagarde to face French trial over Tapie affair | Related: IMF head Lagarde to face French trial over Tapie affair |
| 3.46pm GMT | 3.46pm GMT |
| 15:46 | 15:46 |
| Wall Street continues to decline, following its immediate rise on Wednesday after the US Federal Reserve raised interest rates and promised only gradual increases in future. | Wall Street continues to decline, following its immediate rise on Wednesday after the US Federal Reserve raised interest rates and promised only gradual increases in future. |
| After a near 225 point increase in the wake of the Fed announcement, the Dow Jones Industrial Average is now down 61 points or 0.35%. | After a near 225 point increase in the wake of the Fed announcement, the Dow Jones Industrial Average is now down 61 points or 0.35%. |
| The US fall has taken (some of) the shine off European shares. The FTSE 100 is now 0.9% higher at 6116, down from the day’s peak of 6160. Germany’s Dax is up 2.8% at at 10765 having earlier touched 10829. | The US fall has taken (some of) the shine off European shares. The FTSE 100 is now 0.9% higher at 6116, down from the day’s peak of 6160. Germany’s Dax is up 2.8% at at 10765 having earlier touched 10829. |
| Updated | Updated |
| at 3.46pm GMT | at 3.46pm GMT |
| 3.17pm GMT | 3.17pm GMT |
| 15:17 | 15:17 |
| Christine Lagarde’s lawyer has told Reuters that he will recommend she appeals the decision to try her over the Bernard Tapie affair. | Christine Lagarde’s lawyer has told Reuters that he will recommend she appeals the decision to try her over the Bernard Tapie affair. |
| 3.15pm GMT | 3.15pm GMT |
| 15:15 | 15:15 |
| It looks like French journal Mediapart got the scoop about Christine Lagarde facing trial. | It looks like French journal Mediapart got the scoop about Christine Lagarde facing trial. |
| Here’s their story: | Here’s their story: |
| French judges send IMF chief Lagarde for trial | French judges send IMF chief Lagarde for trial |
| 3.05pm GMT | 3.05pm GMT |
| 15:05 | 15:05 |
| Lagarde 'to face trial' over Tapie affair | Lagarde 'to face trial' over Tapie affair |
| French media are reporting that the managing director of the International Monetary Fund, Christine Lagarde, is to face trial over the Tapie financial scandal that had dogged France. | French media are reporting that the managing director of the International Monetary Fund, Christine Lagarde, is to face trial over the Tapie financial scandal that had dogged France. |
| BREAKING: French court orders IMF head Christine Lagarde to face trial over credit Lyonnais/Bernard Tapie affair - french media | BREAKING: French court orders IMF head Christine Lagarde to face trial over credit Lyonnais/Bernard Tapie affair - french media |
| Bernard Tapie is a businessman who received €403m in compensation from the French government, over the sale of Adidas in 1993. | Bernard Tapie is a businessman who received €403m in compensation from the French government, over the sale of Adidas in 1993. |
| Tapie, an ally of former president Nicholas Sarkozy, claimed to have been defrauded by the now-defunct Crédit Lyonnais bank over the affair. Sarkozy’s administration agreed the payment; Lagarde was finance minister at the time. | Tapie, an ally of former president Nicholas Sarkozy, claimed to have been defrauded by the now-defunct Crédit Lyonnais bank over the affair. Sarkozy’s administration agreed the payment; Lagarde was finance minister at the time. |
| She has consistently denied any wrong-doing. | She has consistently denied any wrong-doing. |
| In August 2014 the IMF chief was played under investigation by magistrates, over charges of “simple negligence”. | In August 2014 the IMF chief was played under investigation by magistrates, over charges of “simple negligence”. |
| Related: Christine Lagarde to be investigated for alleged role in political fraud case | Related: Christine Lagarde to be investigated for alleged role in political fraud case |
| Updated | Updated |
| at 3.07pm GMT | at 3.07pm GMT |
| 2.44pm GMT | 2.44pm GMT |
| 14:44 | 14:44 |
| That didn’t last long... the Dow is now down 30 points. | That didn’t last long... the Dow is now down 30 points. |
| 2.35pm GMT | 2.35pm GMT |
| 14:35 | 14:35 |
| US stocks open higher after rate hike https://t.co/4tB0iaAeZP pic.twitter.com/ULsP5emsvw | US stocks open higher after rate hike https://t.co/4tB0iaAeZP pic.twitter.com/ULsP5emsvw |
| 2.33pm GMT | 2.33pm GMT |
| 14:33 | 14:33 |
| Wall Street opens higher | Wall Street opens higher |
| Ding ding! | Ding ding! |
| Shares are inching higher on Wall Street as traders returned to their desks in New York after yesterday’s excitement. | Shares are inching higher on Wall Street as traders returned to their desks in New York after yesterday’s excitement. |
| The Dow has gained 45 points (+0.25%) in the first few minutes of trading. | The Dow has gained 45 points (+0.25%) in the first few minutes of trading. |
| Updated | Updated |
| at 2.44pm GMT | at 2.44pm GMT |
| 2.12pm GMT | 2.12pm GMT |
| 14:12 | 14:12 |
| The latest weekly US unemployment figures are out. | The latest weekly US unemployment figures are out. |
| And they don’t suggest that the Fed made a catastrophic error by raising borrowing costs last night. | And they don’t suggest that the Fed made a catastrophic error by raising borrowing costs last night. |
| The number of Americans filing new claims for jobless benefit fell last week, to 271,00. That’s 11,000 fewer than last week (which was a five-month high). | The number of Americans filing new claims for jobless benefit fell last week, to 271,00. That’s 11,000 fewer than last week (which was a five-month high). |
| The initial jobless claims figure has been below 300,000 every week since early March, suggesting the labour market has been strengthening. | The initial jobless claims figure has been below 300,000 every week since early March, suggesting the labour market has been strengthening. |
| 1.56pm GMT | 1.56pm GMT |
| 13:56 | 13:56 |
| Janet Yellen may not receive Christmas cards from many gold bugs this year. | Janet Yellen may not receive Christmas cards from many gold bugs this year. |
| The gold price has dropped by over 1% today to $1,058 per ounce, hit by the stronger dollar following the rise in US interest rates. | The gold price has dropped by over 1% today to $1,058 per ounce, hit by the stronger dollar following the rise in US interest rates. |
| RT tbiesheuvel: The delayed Fed fallout. #Gold goes back below $1,060 https://t.co/lSynSfGS7i pic.twitter.com/CHGYxXUUNw #trading | RT tbiesheuvel: The delayed Fed fallout. #Gold goes back below $1,060 https://t.co/lSynSfGS7i pic.twitter.com/CHGYxXUUNw #trading |
| Updated | Updated |
| at 2.00pm GMT | at 2.00pm GMT |
| 1.36pm GMT | 1.36pm GMT |
| 13:36 | 13:36 |
| This chart shows how the peso has caught up with reality... | This chart shows how the peso has caught up with reality... |
| #Argentina Peso falls 29% after Macri lifts currency controls. Official Peso now near Black market Peso. pic.twitter.com/wl4HVUzAG2 | #Argentina Peso falls 29% after Macri lifts currency controls. Official Peso now near Black market Peso. pic.twitter.com/wl4HVUzAG2 |
| 1.34pm GMT | 1.34pm GMT |
| 13:34 | 13:34 |
| Argentina's peso plunges by 30% | Argentina's peso plunges by 30% |
| Argentina’s currency has just slumped by 30% against the dollar as the government lifts foreign exchange controls that had kept it artificially high. | Argentina’s currency has just slumped by 30% against the dollar as the government lifts foreign exchange controls that had kept it artificially high. |
| The peso is changing hands at 14 to the US dollar, from around 10 last night. That’s broadly in line with the black market rate; a scarcity of US dollars has meant Argentines have had to pay much more than the official exchange rate. | The peso is changing hands at 14 to the US dollar, from around 10 last night. That’s broadly in line with the black market rate; a scarcity of US dollars has meant Argentines have had to pay much more than the official exchange rate. |
| *ARGENTINE PESO FALLS 29% TO 13.9/USD ON MAE IN BUENOS AIRES | *ARGENTINE PESO FALLS 29% TO 13.9/USD ON MAE IN BUENOS AIRES |
| The decision to allow the peso to float free is one of the first moves by the new Buenos Aires government. | The decision to allow the peso to float free is one of the first moves by the new Buenos Aires government. |
| Finance minister Alfonso Prat-Gay said it was an important step towards revitalising the country’s economy and encouraging foreign investment: | Finance minister Alfonso Prat-Gay said it was an important step towards revitalising the country’s economy and encouraging foreign investment: |
| His message was: | His message was: |
| “He who wants to import will be able to do so, and he who wants to buy dollars will be able to buy them.” | “He who wants to import will be able to do so, and he who wants to buy dollars will be able to buy them.” |
| Related: Argentina lifts currency controls, floats peso in bid to boost economy | Related: Argentina lifts currency controls, floats peso in bid to boost economy |
| 1.12pm GMT | 1.12pm GMT |
| 13:12 | 13:12 |
| The bulls are out on the Frankfurt stock exchange today: | The bulls are out on the Frankfurt stock exchange today: |
| Germany’s DAX index is galloping ahead today, up over 3%. | Germany’s DAX index is galloping ahead today, up over 3%. |
| That’s a nine-day high, clawing back some of the losses since the European Central Bank disappointed investors with its latest stimulus package. | That’s a nine-day high, clawing back some of the losses since the European Central Bank disappointed investors with its latest stimulus package. |
| Mike van Dulken, head of research at Accendo Markets, says European traders are embracing last night’s Fed rate hike: | Mike van Dulken, head of research at Accendo Markets, says European traders are embracing last night’s Fed rate hike: |
| The decision to raise rates for the first time following almost a decade of crises and unconventional policy measures is being welcomed as much for its end to uncertainty as its vote of confidence in US economic recovery. | The decision to raise rates for the first time following almost a decade of crises and unconventional policy measures is being welcomed as much for its end to uncertainty as its vote of confidence in US economic recovery. |
| Has Yellen fired the starting pistol for a return to conventional policy and a delayed Santa Rally? | Has Yellen fired the starting pistol for a return to conventional policy and a delayed Santa Rally? |
| Updated | Updated |
| at 1.14pm GMT | at 1.14pm GMT |
| 12.35pm GMT | 12.35pm GMT |
| 12:35 | 12:35 |
| Investors are pushing up the prices of eurozone government bonds today, in another sign that the Fed rate hike is being taken well. | Investors are pushing up the prices of eurozone government bonds today, in another sign that the Fed rate hike is being taken well. |
| This has pushed down the yield (or interest rate) on debt issued by every major eurozone country, and also the UK: | This has pushed down the yield (or interest rate) on debt issued by every major eurozone country, and also the UK: |
| European bonds rally as #Fed emphasizes gradual eate trajectory https://t.co/j3Upxw0l5J via @anoojad pic.twitter.com/XgG9B4sVHY | European bonds rally as #Fed emphasizes gradual eate trajectory https://t.co/j3Upxw0l5J via @anoojad pic.twitter.com/XgG9B4sVHY |
| The mini-rally shows traders aren’t panicking that central banks are going to tighten monetary policy aggressively. | The mini-rally shows traders aren’t panicking that central banks are going to tighten monetary policy aggressively. |
| Eric Vanraes, fixed income portfolio manager at EI Sturdza Investment Funds, explains (via Reuters) | Eric Vanraes, fixed income portfolio manager at EI Sturdza Investment Funds, explains (via Reuters) |
| “There were fears of a mistake from the Fed if it were too confident or too hawkish.” | “There were fears of a mistake from the Fed if it were too confident or too hawkish.” |
| But it was good news ... so phew! We can go on the Christmas holiday. We can have a small rally everywhere.” | But it was good news ... so phew! We can go on the Christmas holiday. We can have a small rally everywhere.” |
| 12.13pm GMT | 12.13pm GMT |
| 12:13 | 12:13 |
| James Hughes, chief market analyst at trading company GKFX, captures the mood in the City: | James Hughes, chief market analyst at trading company GKFX, captures the mood in the City: |
| Despite continued market rally it feels like Fed announcement was the end of the year for traders. Now lets all relax for Christmas | Despite continued market rally it feels like Fed announcement was the end of the year for traders. Now lets all relax for Christmas |
| 11.54am GMT | 11.54am GMT |
| 11:54 | 11:54 |
| Bloomberg is reporting that Martin Shkreli, the entrepreneur who attracted global opprobrium after he raised the price of an anti-infective drug by more than 5,000 percent, has been arrested on securities fraud charges: | Bloomberg is reporting that Martin Shkreli, the entrepreneur who attracted global opprobrium after he raised the price of an anti-infective drug by more than 5,000 percent, has been arrested on securities fraud charges: |
| Details are a little scarce, but here’s what they know so far: | Details are a little scarce, but here’s what they know so far: |
| Prosecutors charged him with illegally taking stock from Retrophin Inc., a biotechnology firm he started in 2011, and using it pay off debts from unrelated business dealings. He was later ousted from the company, where he’d been chief executive officer, and sued by its board. | Prosecutors charged him with illegally taking stock from Retrophin Inc., a biotechnology firm he started in 2011, and using it pay off debts from unrelated business dealings. He was later ousted from the company, where he’d been chief executive officer, and sued by its board. |
| In the case that closely tracks that suit, federal prosecutors accused Shkreli of engaging in a complicated shell game after his defunct hedge fund, MSMB Capital Management, lost millions. He is alleged to have made secret payoffs and set up sham consulting arrangements. | In the case that closely tracks that suit, federal prosecutors accused Shkreli of engaging in a complicated shell game after his defunct hedge fund, MSMB Capital Management, lost millions. He is alleged to have made secret payoffs and set up sham consulting arrangements. |
| More here: | More here: |
| Pharma CEO #MartinShkreli arrested on charges of securities fraud https://t.co/w5pnCbK3jQ | Pharma CEO #MartinShkreli arrested on charges of securities fraud https://t.co/w5pnCbK3jQ |
| 11.42am GMT | 11.42am GMT |
| 11:42 | 11:42 |
| Spread-betting firms are predicting that the US stock market will hold onto yesterday’s gains. | Spread-betting firms are predicting that the US stock market will hold onto yesterday’s gains. |
| The Dow Jones industrial average is expected to open 58 points higher, according to IG. | The Dow Jones industrial average is expected to open 58 points higher, according to IG. |
| That would add to Wednesday’s 224-point jump, suggesting Wall Street is getting into the festive spirit. The huge Christmas tree outside the New York stock exchange may help..... | That would add to Wednesday’s 224-point jump, suggesting Wall Street is getting into the festive spirit. The huge Christmas tree outside the New York stock exchange may help..... |
| 11.16am GMT | 11.16am GMT |
| 11:16 | 11:16 |
| Photographers have been hard at work across Asia, capturing today’s market rally: | Photographers have been hard at work across Asia, capturing today’s market rally: |
| 10.50am GMT | 10.50am GMT |
| 10:50 | 10:50 |
| RBS: Fed may end up cutting rates | RBS: Fed may end up cutting rates |
| RBS has produced a handy chart showing how the markets are expecting US interest rates to rise much slower than in the past: | RBS has produced a handy chart showing how the markets are expecting US interest rates to rise much slower than in the past: |
| They also warn that emerging markets could be threatened if the Fed hikes aggressively, as they have built up higher debts in recent years. | They also warn that emerging markets could be threatened if the Fed hikes aggressively, as they have built up higher debts in recent years. |
| [That’s partly because ‘hot money’ has flooded out of the US in search of high returns] | [That’s partly because ‘hot money’ has flooded out of the US in search of high returns] |
| If the Fed hikes faster than expected, wtach out emerging markets! Blog: https://t.co/tozPYq6CNt pic.twitter.com/Kfj7HtrmLC | If the Fed hikes faster than expected, wtach out emerging markets! Blog: https://t.co/tozPYq6CNt pic.twitter.com/Kfj7HtrmLC |
| But there’s also a danger that the Fed might be forced to cut rates if growth and inflation are weaker than forecast. | But there’s also a danger that the Fed might be forced to cut rates if growth and inflation are weaker than forecast. |
| Here’s the full research note. | Here’s the full research note. |
| Updated | Updated |
| at 11.09am GMT | at 11.09am GMT |
| 10.07am GMT | 10.07am GMT |
| 10:07 | 10:07 |
| After two hours of trading, European markets are holding onto their early gains. | After two hours of trading, European markets are holding onto their early gains. |
| The rally is particularly strong in Frankfurt and Paris; traders are welcoming the Federal Reserve’s confidence in the US economy, and its pledge to only raise rates gradually. | The rally is particularly strong in Frankfurt and Paris; traders are welcoming the Federal Reserve’s confidence in the US economy, and its pledge to only raise rates gradually. |
| Alex Lydall, senior sales trader at Foenix Partners, says the Fed chair’s upbeat but sober pronouncements last night have gone down well: | Alex Lydall, senior sales trader at Foenix Partners, says the Fed chair’s upbeat but sober pronouncements last night have gone down well: |
| A sigh of relief swept across financial markets as Janet Yellen confirmed months of speculation and hiked interest rates by 0.25% for the first time in nine years. A very measured statement proceeded, with an almost academic approach of both positivity and caution. | A sigh of relief swept across financial markets as Janet Yellen confirmed months of speculation and hiked interest rates by 0.25% for the first time in nine years. A very measured statement proceeded, with an almost academic approach of both positivity and caution. |
| Here’s the picture: | Here’s the picture: |
| But commodity prices continue to suffer from the weaker dollar. | But commodity prices continue to suffer from the weaker dollar. |
| Oil, copper, iron ore, platinum, silver and gold all lower... | Oil, copper, iron ore, platinum, silver and gold all lower... |
| Updated | Updated |
| at 10.07am GMT | at 10.07am GMT |
| 9.44am GMT | 9.44am GMT |
| 09:44 | 09:44 |
| UK retail sales smash forecasts | UK retail sales smash forecasts |
| Here’s a surprise.... UK retail sales smashed expectations last month, as shoppers gorged on Black Friday bargains via the internet. | Here’s a surprise.... UK retail sales smashed expectations last month, as shoppers gorged on Black Friday bargains via the internet. |
| Retail sales jumped by 1.7% on the month, beating forecasts of 0.6%. They were 5% higher than in November 2014. | Retail sales jumped by 1.7% on the month, beating forecasts of 0.6%. They were 5% higher than in November 2014. |
| The Office for National Statistics reports that online sales jumped sharply. | The Office for National Statistics reports that online sales jumped sharply. |
| Shoppers also benefitted from falling prices, as retailers tried to drum up business: | Shoppers also benefitted from falling prices, as retailers tried to drum up business: |
| Super strong retail sales in UK looks as though it's helped a lot by online sales. Black Friday shopping from desk was a thing... | Super strong retail sales in UK looks as though it's helped a lot by online sales. Black Friday shopping from desk was a thing... |
| Updated | Updated |
| at 9.44am GMT | at 9.44am GMT |
| 9.37am GMT | 9.37am GMT |
| 09:37 | 09:37 |
| Breaking away from the Fed briefly, the latest survey from Germany shows that businesses are less optimistic this month. | Breaking away from the Fed briefly, the latest survey from Germany shows that businesses are less optimistic this month. |
| The business climate index produced by the IFO institute fell to 108.7 points, down from 109. | The business climate index produced by the IFO institute fell to 108.7 points, down from 109. |
| The measure of the “current situation” slid to 112.8 points, down from 113.4 in November, meaning firms are finding conditions a bit tougher this month. | The measure of the “current situation” slid to 112.8 points, down from 113.4 in November, meaning firms are finding conditions a bit tougher this month. |
| 9.32am GMT | 9.32am GMT |
| 09:32 | 09:32 |
| Today’s market rally may not last long, argues Michael Holland, managing director of ratings and research firm FE Trustnet: | Today’s market rally may not last long, argues Michael Holland, managing director of ratings and research firm FE Trustnet: |
| After the pain of recent weeks, the current market rally will please many – but one suspects this is a bit of dead cat bounce. It should be seen more as a sigh of relief that something that was predicted actually followed through, rather than the markets are happy that the rate has been hiked. | After the pain of recent weeks, the current market rally will please many – but one suspects this is a bit of dead cat bounce. It should be seen more as a sigh of relief that something that was predicted actually followed through, rather than the markets are happy that the rate has been hiked. |
| Typically, interest rates going up is viewed negatively by the equity markets – because historically this means that they will see greater outflows as higher interest rates lure investors away. | Typically, interest rates going up is viewed negatively by the equity markets – because historically this means that they will see greater outflows as higher interest rates lure investors away. |
| 9.24am GMT | 9.24am GMT |
| 09:24 | 09:24 |
| The first Fed hike is the most exciting, but it still leaves borrowing costs very low in historical terms: | The first Fed hike is the most exciting, but it still leaves borrowing costs very low in historical terms: |
| Your Fed hike in context from BofAML: pic.twitter.com/MXGk2VV6Jx | Your Fed hike in context from BofAML: pic.twitter.com/MXGk2VV6Jx |
| Updated | Updated |
| at 9.24am GMT | at 9.24am GMT |
| 9.13am GMT | 9.13am GMT |
| 09:13 | 09:13 |
| Commodity prices are hitting fresh 17-year lows this morning, as the impact of the Fed rate hike ripples through the market. | Commodity prices are hitting fresh 17-year lows this morning, as the impact of the Fed rate hike ripples through the market. |
| Copper, zinc and oil are all suffering, pushing Bloomberg’s broad measure of commodity prices down towards record low levels: | Copper, zinc and oil are all suffering, pushing Bloomberg’s broad measure of commodity prices down towards record low levels: |
| Bloomberg Commodity Index extends losses to 76.70, approaching historical low at 74.24 pic.twitter.com/z0nHddulsr | Bloomberg Commodity Index extends losses to 76.70, approaching historical low at 74.24 pic.twitter.com/z0nHddulsr |
| This is partly due to the stronger US currency, which means you need fewer dollars to buy the same quantity of metal or crude. | This is partly due to the stronger US currency, which means you need fewer dollars to buy the same quantity of metal or crude. |
| It also reflects the impact on emerging market economies, who could suffer capital outflows as traders chase higher rates of return from US assets. | It also reflects the impact on emerging market economies, who could suffer capital outflows as traders chase higher rates of return from US assets. |