Kaohoon Morning Brief – 4 February 2022

1) BOE raises interest rates to 0.50% for second consecutive month

Bank of England raised interest rates on Thursday by 25 basis points to 0.50%, marking its first back-to-back increases in more than 17 years. The central bank also would size down large holdings of government and corporate bonds.

The decision to raise interest rates came as England’s inflation reached its three-decade high with an annual rate rising to 5.4 percent in December.


2) ECB maintains policy rate

Aside from the Bank of England raising interest rates, the European Central Bank (ECB) kept its policy unchanged as expected even though the eurozone inflation of 5.1% is running hotter than expected and with risks tilted to the upside.

European Central Bank President Christine Lagarde stated that policymakers would not rush into new moves, but did not repeat her past comment that a rate hike in 2022 was very unlikely.


3) US jobless claims fall for two straight weeks

The number of Americans filing for unemployment benefits for the week ended January 29 fell to 238,000 claims, compared to 245,000 expected and a revised 261,000 during the prior week. The claim slowed down for a back-to-back week after reaching near 300,000 in mid-January this year as a result of the omicron outbreak that led to a temporary closure of shops and restaurants.


4) Wall Street closes lower in a disappointment of Facebook’s earnings

Wall Street plunged last night, dragged by the tech-heavy Nasdaq Composite in a disappointment of Facebook’s 4Q21 results that missed expectations, sending the share price of Meta to fall more than 26% last night.

Dow Jones closed 1.45% lower at 35,111.16 points. S&P 500 fell 2.44% and Nasdaq plunged 3.74%.

However, Nasdaq Futures bounced back nearly 2% this morning after strong earnings results from Amazon and Snapchat lifted the market up.