Pre-market futures trading had already set the scene for a shocker. The reality was worse.
The single inflation statistic from the US was the game changer for world equity markets. It signalled that those that had been holding a collective breath hoping that twere exposed as Pollyannas. It was the number that not only demonstrated that central banks would need to double down on raising interest rates, but also provided a portent that such an aggressive monetary policy response risked sparking an economic recession., the majority of economists were not predicting a recession.
By lunchtime, ANZ had fallen 4.2 per cent, National Australia Bank had dived 3.8 per cent, Westpac was trailing its previous close by 3.7 per cent and CBA had lost 4.23 per cent. While increasing interest rates generally play well to improved bank profits, the larger than expected rise in the cash rate raised alarm bells about the emergence of problem loans. The rate rise also raised the spectre of an increased risk of a recession – and banks’ profitability is closely tied to the overall economy.Miners like BHP Rio and Fortescue, that have been enjoying elevated commodity prices for most of the year, the ride was just as rough.
Source: News Formal (newsformal.com)
EKnightOfficial opinion: cancel your SMH subscription
EKnightOfficial SMH credibility is in the bin. You wrote what you did with bitterness & with an intention to hurt and harm Rebel. You wanted revenge, you used your keyboard with words as weapons to strike & play yourself as the victim. This apology is only so you'll stop being held accountable.