The European Central Bank is set to raise interest rates for the first time in 11 years on Thursday with a larger-than-said move increasingly likely as policymakers fear losing control of unbridled consumer price growth.

- Political developments in Italy and renewed uncertainty over energy supplies, including from Nord Stream1, have impacted the overall market sentiment.

- The Consumer Price Index in the UK surged by 9.4% YoY in June, while the Canadian CPI climbed by 8.1% in the same period, both up from May figures. On the US front, Existing-home sales declined for the fifth straight month to a seasonally adjusted annual rate of 5.12 million. Sales were down 5.4% from May and 14.2% from one year ago.

Equities:

- The US stock market continued its recent rally, with technology stocks jumping. For the entire market, earnings remain in the investors’ focus.

- Wall Street opened with modest gains, but US indexes took a turn to the worst amid news big companies are cutting off jobs.

- Google was the first one, announcing it would pause recruitment for two week, while Ford unveiled plans to cut as many as 8000 jobs in the coming weeks amid recession concerns. The Dow Jones Industrial Average added about 17 points, or 0.05%, ending near 31,835.

- The S&P 500 index rose 0.59%, while the Nasdaq closed 0.89% higher.

Currency Market:

- The US Dollar Index made a confident pullback after sensing lower selling pressure around 106.33 points. USD achieved modest gains against CHF and JPY.

- The EUR/USD pair’s price has recovery signs and is likely to recapture 1.0200 on ECB’s rate hike expectations. The pair trades around 1.0170, while GBP/USD was once again unable to retain gains above the 1.2000 threshold and hovers in the 1.1960 price zone.

- The AUD/USD pair is marginally lower, holding below 0.6900, while USD/CAD consolidates around 1.2870.

Commodities: Gold

- Gold prices fell to a fresh weekly low, their lowest levels in nearly a year, as prospects for an interest rate hike by major central banks to curb spiralling inflation weighed on the precious metal’s allure.

- The price fell in immediate transactions by 0.5% recording $1682 near to its lowest level since early August 2021.

Commodities: Oil

- Oil prices fell for a second session after higher U.S. gasoline stockpiles stoked demand worries and returning energy supply from Libya and Russia eased supply concerns.

- The European Central Bank is set to join other central banks in hiking rates, focusing on fighting runaway inflation rather than the economic downturn, which, in turn, can weigh on oil demand.

- Brent crude dropped $2.36, or 2.2%, to $104.56 a barrel after slipping 0.4% in the previous session. U.S. WTI crude fell $2.49, or 2.5%, to $97.39 a barrel following a 1.9% drop on Wednesday.

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