Market Information Friday 4 November 2022

The US central bank raised interest rates again by 75 basis points on Wednesday night. Fed chairman Jerome Powell indicated that it was likely to raise rates at a slightly slower pace, but that the interest rate peak might be higher than expected. The Fed’s comments reinforced recession fears and depressed the outlook for oil demand. In addition, the dollar got a ‘boost’ after the interest rate decision, which is also unfavourable for oil demand. Oil prices fell on Thursday, at a settlement of USD 88.17, the price of a barrel of West Texas Intermediate was 2.0% lower.

Annual inflation in Turkey climbed to a new 24-year high of 85.51% in October, official data showed on Thursday, slightly below forecast, after the central bank cut its policy rate despite surging prices. In the last three months, the central bank slashed its policy rate by a total of 350 basis points to 10.5%. It promised another cut this month as the final move in the current easing cycle, running counter to the global monetary policy tightening trend.

The Bank of England has signalled that borrowing costs will not rise as much as markets expect in the future, even as it imposed the biggest rate rise for three decades to combat soaring inflation. The BoE’s 0.75 percentage point increase to 3% took interest rates to their highest point since 2008. But the central bank issued unusually strong guidance that rates would not need to rise much further to bring inflation back to its 2% target, partly because it forecasts a prolonged recession ahead.

The 6M Euribor increased with 3 basis points to 2.20% compared to previous business day. The 10Y Swap increased with 9 basis points to 3.11% compared to previous business day.

In the attachment, today’s market data on money and capital market rates as well as other rates are presented.