Bank of England pushed through with the biggest interest rate rise in 27 years, raising the key rate by 50bps to 1.75%. Investors expect the UK’s key interest rate to reach almost 3% by early-2023. Pound weakens against key currencies despite the interest rate hike on pessimistic UK’s economic outlook.
US economy teetering on the brink of recession as GDP contracts for two consecutive quarters in 2Q22. US’ GDP fell by 0.9% in 2Q22, after a 1.6% decline in 1Q22, with the economy contracting by 1.3% in 1H 2022 (qualified for a “technical recession”). Concerns over a possible recession had driven a sharp selloff in stocks in 1H 2022. But the US equity indices ended July with their biggest monthly percentage gains since 2020, partly because of stronger-than-expected corporate earnings.
Global oil prices fell 4% on higher US oil inventories, spot gold contains by strong USD and higher rates/yields. Asian stocks rose in volatile trades on Thursday as geopolitics ease and investors took cues from US data and earnings.