Aggressive rate hike expectations from the Fed, ECB, and BoE to fight inflation [Video]

Ipek Ozkardeskaya Swissquote Bank Ltd

We spent the weekend talking about whether Credit Suisse will finally go bust or not. The share price is down below 4 francs a share, and the credit default swaps are going through the roof. The 5-year CDS for Credit Suisse spiked to 250 from around 60 at the start of the year. It means that the market is aggressively pricing a default for one of the biggest Swiss banks.

Is it possible? Yes, it is possible, but it is highly unlikely.

Zooming out, the third quarter ends with losses, even though we thought that the summer rally could’ve given something. But no.

The S&P 500 finished the 3rd quarter having slipped to the lowest levels this year. The same is true for Nasdaq and the Dow Jones. $24 trillion have been wiped out of the stocks so far this year.

And the last quarter begins with aggressive rate hike expectations from the Federal Reserve (Fed), but also from the European Central Bank (ECB) and the Bank of England (BoE) to fight inflation and the dollar strength.
Nike has been the latest company warning investors of falling profits due to mountains of stockpiles that they inherited from the pandemic times – and which brought the company to make nice price discounts -, and the strong dollar.

This week, we will watch how Tesla will react to the latest delivery report, the OPEC decision and the US jobs figures… and hope that this week’s jobs data doesn’t reveal strong job additions, and solid salary growth in the US.

Author

Ipek Ozkardeskaya

Swissquote Bank Ltd

Ipek Ozkardeskaya began her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked in HSBC Private Bank in Geneva in relation to high and ultra-high-net-worth clients.

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