European stocks slid on Friday at the end of a tumultuous week for stock and bond markets, after the US Federal Reserve set the stage for a wave of interest rate hikes by other global central banks.
The regional Stoxx 600 gauge lost 0.2% in early trades, while Britain’s FTSE 100 edged down 0.1%. In Asia, the Hong Kong Hang Seng lost 0.7%. Japanese markets were closed for a public holiday.
The moves left a FTSE gauge of global stocks on track for a weekly decline of more than 3%, after a particularly volatile trading day boosted by the Fed and its peers aggressively raising borrowing costs to curb inflation. .
The US central bank raised interest rates by 0.75 percentage points on Wednesday, marking the third consecutive hike of such magnitude and raising its target range to 3 to 3.25%.
A day later, the Bank of England joined the tightening trend – raising rates by 0.5 percentage points to 2.25%, while the Swiss National Bank took its lending rate back into positive territory for the first time since 2015, at 0.5%.
Concerns have intensified this year that the world’s most influential rate regulators will turn the screw on monetary policy to such an extent that they will crush demand, worsening an economic downturn.
Those fears have put mounting pressure on government and corporate debt, with the global fixed-income market on track to end its eighth consecutive week of declines, according to an Ice Data Services index. The sell-off took global borrowing costs to their highest level since June 2009, at nearly 3.8%, from around 1.3% at the end of last year.
Debt market movements were more stable on Friday, with the 10-year US Treasury yield falling 0.02 percentage points to 3.69%. The benchmark instrument was still on track to end the week with its highest level since 2011. The German Bund’s equivalent yield fell 0.03 percentage points to 1.95%, while the gilt yield British 10-year bond fell by the same amount to 3.47%.
Traders in London were set to hear more details of the UK government’s plans to revive the economy with a bold program of tax cuts. New Chancellor Kwasi Kwarteng was due to deliver his first budget statement to Parliament at 9.30am UK time, which will include a 30-point growth agenda in a bid to deal with shock Britain’s stagnant economy.
The dollar rose 0.4% against a basket of six other currencies to hit a new 20-year high. The pound lost 0.6% against the greenback to hit a new 37-year low at $1.119, while the euro slipped 0.4% to stay below parity with the US currency at $0.979.
European stocks slid on Friday at the end of a tumultuous week for stock and bond markets, after the US Federal Reserve set the stage for a wave of interest rate hikes by other global central banks.
The regional Stoxx 600 gauge lost 0.2% in early trades, while Britain’s FTSE 100 edged down 0.1%. In Asia, the Hong Kong Hang Seng lost 0.7%. Japanese markets were closed for a public holiday.
The moves left a FTSE gauge of global stocks on track for a weekly decline of more than 3%, after a particularly volatile trading day boosted by the Fed and its peers aggressively raising borrowing costs to curb inflation. .
The US central bank raised interest rates by 0.75 percentage points on Wednesday, marking the third consecutive hike of such magnitude and raising its target range to 3 to 3.25%.
A day later, the Bank of England joined the tightening trend – raising rates by 0.5 percentage points to 2.25%, while the Swiss National Bank took its lending rate back into positive territory for the first time since 2015, at 0.5%.
Concerns have intensified this year that the world’s most influential rate regulators will turn the screw on monetary policy to such an extent that they will crush demand, worsening an economic downturn.
Those fears have put mounting pressure on government and corporate debt, with the global fixed-income market on track to end its eighth consecutive week of declines, according to an Ice Data Services index. The sell-off took global borrowing costs to their highest level since June 2009, at nearly 3.8%, from around 1.3% at the end of last year.
Debt market movements were more stable on Friday, with the 10-year US Treasury yield falling 0.02 percentage points to 3.69%. The benchmark instrument was still on track to end the week with its highest level since 2011. The German Bund’s equivalent yield fell 0.03 percentage points to 1.95%, while the gilt yield British 10-year bond fell by the same amount to 3.47%.
Traders in London were set to hear more details of the UK government’s plans to revive the economy with a bold program of tax cuts. New Chancellor Kwasi Kwarteng was due to deliver his first budget statement to Parliament at 9.30am UK time, which will include a 30-point growth agenda in a bid to deal with shock Britain’s stagnant economy.
The dollar rose 0.4% against a basket of six other currencies to hit a new 20-year high. The pound lost 0.6% against the greenback to hit a new 37-year low at $1.119, while the euro slipped 0.4% to stay below parity with the US currency at $0.979.