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Stocks in Europe and US extend upward move
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China asks local governments to prepare for Evergrande collapse
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Rate decisions from CBRT, BoE and Norges Bank
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Disappointing flash PMIs for September
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Bitcoin gains on Twitter news
Stock markets around the world move higher on Thursday. Major benchmarks from Europe finished today's trading around 1% higher and indices from Wall Street are trading over 1% higher at press time. This is surprising given that flash PMIs for September from Europe and the United States disappointed today. Manufacturing and services indices were expected to drop but decline was bigger than expected, with supply bottlenecks and weakening demand being seen as prime reasons.
Today's performance of equity markets may suggest that Evergrande concerns eased. However, this is far from true, especially given news that arrived on the markets today. China urged the company to avoid near-term default on its USD bonds but at the same time asked local governments to prepare for the downfall of the Chinese developer and resulting consequences. In other news it was reported that the company's EV unit has halted payments to its staff and suppliers.
Big moves could have been spotted on the FX market today after the Central Bank of the Republic of Turkey, Bank of England and Norges Bank announced monetary policy decisions. The Norwegian central bank became the first one from a developed country to hike rates in post-Covid era. Norges Bank increased rates by 25 basis points and provided a boost for NOK. On the other hand, CBRT delivered an unexpected rate cut and has pushed lira to fresh record lows. When it comes to the Bank of England, rates were left unchanged but the announcement was viewed as a hawkish one and boosted odds for a rate hike at the beginning of 2022.
Bitcoin gained around $1,000 in the evening following the announcement from Twitter. US social media company said that users using an iOS app will be able to tip others with Bitcoin.
USDTRY trades around 1.5% higher on the day after CBRT delivered an unexpected rate cut. The pair has been trading lower before CBRT announcement and jumped almost over 2% afterwards. While USDTRY pulled back from daily highs, a new record high on the pair was reached. Source: xStation5
