He can certainly understand the investor turmoil. “It leaves doubts as to whether the Fed can keep inflationary processes under control as desired,” Kater said. The fact that other central banks, such as the Swiss central bank, are now following the Fed’s lead is putting further pressure on the markets.
Because the financial world sees it above all as a signal: the Swiss Central Bank also seems to have doubts about Switzerland’s resilience. “It was speculated that the SNB might move away from its significantly negative interest rates,” said Jane Foley, investment strategist at Rabobank. “Today’s rate hike is still a big surprise.”
Commodity prices go down
In response, the Swiss currency appreciated enormously. In return, the dollar and euro sometimes lost about two percent each and were heading for the largest daily loss in about seven years. The SMI stock index fell as much as 3.2 percent to a one and a half year low of 10,441.62 points.
General fears of a recession were reflected, among other things, in falling commodity prices. North Sea Brent oil and industrial metallic copper both fell about 1.5% to $ 116.85 per barrel (159 liters) and $ 9,079 per ton, respectively.
The price of gas rises due to the reduction of Russian gas
The price of gas developed in the opposite direction. The future of European natural gas has increased by 28% to 146 euros per megawatt hour. However, this is not due to an optimistic market, but rather to the reduction of gas supplies from Russia to Germany. On Thursday, the Kremlin even announced that it would temporarily suspend deliveries via the most important pipeline, Nord Stream 1.
“This makes it increasingly difficult to replenish stocks before next winter,” warned data provider ICIS analyst Tom Marsec-Manser. This also weighed heavily on BASF’s share. On Thursday, the newspaper lost more than six percent in value: the chemical industry is one of the industries in Germany that is most dependent on natural gas.
Investors are losing patience with stumbling stocks
Otherwise, online fashion retailers in particular came under pressure after Asos issued a profit warning and Bohoo announced a drop in sales. Investors appear to have little patience for struggling companies given the economic climate.
“If we go into recession or if growth stops abruptly, earnings expectations will decline further,” predicted investment strategist Rupert Thomson of wealth manager Kingswood.
Asos shares temporarily fell a whopping 31% to a 12-year low of 798 pence. Shares of Boohoo fell 19% to 52.62 pence, the cheapest six years ago. Their German rivals Zalando and About You have lost up to ten percent.