ECB rate hike unsettles markets again as worries surge about US regional banks

by | Mar 16, 2023

US debt


Commenting on this afternoon’s latest market news and movements, Susannah Streeter head of money and markets, Hargreaves Lansdown said: 

‘’Reining in inflation appears to be the European Central Bank’s top priority – rather than calming the tremors that have shaken the banking system. Despite expectations that policymakers may go slower on rate hikes, given the volatility on markets and worries wracking the sector, they’ve voted for a 0.5% hike.

Hot inflation is still considered to be a big threat to financial stability, which is why for now, the ECB is sticking to the plan. The DAX dropped into the red, before recovering a little, and the CAC 40 moved lower, while large banks like Deutsche Bank and BNP Paribas also saw share falls. Credit Suisse is clinging onto positive territory, after it grasped the life buoy of a liquidity line from Swiss National Bank, but it’s losing ground.

A lower open on Wall Street is also knocking back sentiment a little after confidence was boosted earlier today by the Swiss action. Fears are resurfacing about the stability of First Republic Bank in the US, with shares diving more than 30% when trading began, after reports it’s mulling its future options, including a sale. Stocks on the S&P 500 are showing signs of recovering after the opening dip, but volatility is likely to remain the order of the day. ‘’

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