ECB, Bank of England (BoE), and Swiss National Bank (SNB) intend to keep raising interest rates

On Wednesday, Tesla (TSLA) reported first-quarter earnings below Wall Street estimates. The company’s stock was down by 2%. A drop in semiconductor stocks also hurt technology companies, as ASML Holdings (ASML) shares fell by 3% after reporting a 46% drop in first-quarter net orders as buying demand remains low. Meta Platforms Inc (META), though not reporting yesterday, saw its shares fall by 1% after the company announced a new wave of job cuts as the drive to cut costs continues.

ECB spokesman Lane said yesterday that if inflation in the Eurozone remains stable, he will vote for further rate hikes. These comments coincide with other comments from ECB officials. The inflation rate in the Eurozone was unchanged compared to the previous month. The consumer price index amounted to 6.9% year-on-year, while core inflation remained at 5.7%. Such data increases the likelihood of an additional 0.5% rate hike at the next ECB meeting.

Inflation in the UK has been above 10% for the seventh month in a row. This has been an important week for the UK economy, starting with yesterday’s employment report, which confirmed the difficult situation in the labor market in the UK. Against this backdrop of the labor market and inflation data, analysts predict that the Bank of England will raise interest rates by another 25 bps next month with almost 100% probability.

The Swiss National Bank’s recent 0.5% interest rate hike is still slowing inflation to just 2% in forecasts, said Andrea Maechler from the SNB, suggesting that additional tightening may be needed. Economists now expect the SNB to give another quarter-point hike, bringing the discount rate to 1.75%.

Crude oil inventories in the United States declined last week at the fastest pace in three weeks. But that hasn’t helped oil prices, which have already lost 4% since the start of this week. There are signs of a significant weakening in global demand for fuel, along with a drop in manufacturing activity. Normally oil prices rise in the run-up to summer on the back of increased travel demand, but at the moment, this is not happening.

Asian markets were mostly down yesterday. Japan’s Nikkei 225 (JP225) decreased by 0.18%, China’s FTSE China A50 (CHA50) was 0.74% lower, Hong Kong’s Hang Seng (HK50) fell by 1.37% by the end of the day, India’s NIFTY 50 (IND50) was 0.23% lower, while Australia’s S&P/ASX 200 (AU200) was 0.07% positive by Wednesday. Asian indices continue to decline, following weakness from Wall Street, as worries about rising interest rates and slowing economic growth made traders cautious about risk-oriented assets.

The People’s Bank of China kept interest rates at 3.65%. But Chinese indices did not get much support for this decision.