All eyes on European Central Bank decision and economic growth

ECB hikes interest rate by 50 basis points

5 July 2023

  • Gold reached its highest level in a month.

  • WTI rose by 0.4% to $67 after breaking $70 level

  • Goldman Raises US Recession Probability to 35%

In the Euro zone

The ECB has followed through with expectations by raising interest rates by 50 basis points. However, despite this action, concerns stemming from the Credit Suisse crisis are hindering the euro's ascent, and the EURUSD is declining, reaching 1.0550.

In today's trading, 10-year European bond yields experienced a surge of more than 2%. European equities were wiped out as Credit Suisse experienced its largest-ever jump in history following the announcement that it had arranged to borrow up to $54 billion from a liquidity facility operated by the Swiss National Bank. The US Treasury market was mixed, with the two-year yield rebounding to 4% after experiencing significant declines in recent days. Bond markets across Europe also decreased, with the German 10-year yield rising by 17 basis points.

US jobs market cooling down

The US Department of Labor reported that for the week ending March 11, 2023, the adjusted initial claims decreased to 192,000 from the previous week's figure of 211,000. In its report, the Department also stated that the advance seasonally adjusted insured unemployment rate for the week ending March 4 remained unchanged at 1.2%, which was the same rate as the previous week's unrevised rate.

Oil Near 15-Month Low due Banking Crisis fears

WTI crude oil is currently trading near $67, which represents a 12% decrease over the past three days. This is the lowest price that WTI crude oil has reached in 15 months, and the decline began due to the US banking crisis and the collapse of Silicon Valley Bank Credit Suisse Group. OPEC's top official had previously expressed concerns about slowing demand in both Europe and the US earlier this month. As a result, investors will be closely monitoring whether the recent decline in oil prices prompts a response from OPEC and its allies.