CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
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Business news: BoE raises rates, UK economy hit by Omicron

By Jenny McCall

12:55, 16 December 2021

General street scene of Chester city centre showing traffic and pedestrian restrictions.
The UK economy has been hit hard by coronavirus restrictions and the Omicron variant – Photo: Shutterstock

Key points

  • The Bank of England has increased interest rates. To lessen the pressure of inflation, the UK central bank raised its main bank rate to 0.25% today.
  • Omicron has hit the UK economy in the last few weeks and renewed business uncertainty, according to IHS Markit/CIPS flash UK composite PMI data.
  • The US Federal Reserve (Fed) announced last night that it will speed up the process by which it removes the pandemic support it put in place.
  • New Zealand’s gross domestic product (GDP) has been hit by Covid, it was announced today. GDP fell by 3.7% on a sequential basis for the quarter ended 30 September 2021, the second largest fall on record, as lockdowns related to the Delta variant hurt economic activity.

Business and economic news

  • Social news website and online message boards operator Reddit has submitted a draft registration statement with the Securities and Exchange Commission (SEC) for a proposed initial public offering (IPO) of its common stock.
  • Swiss-based pharma giant Novartis announced that it will initiate a share buyback of up to $15bn, to be executed by the end of 2023.

Markets

Stocks: US stock index futures rose higher on Thursday after the Fed announced a faster wind-down of its pandemic-era stimulus.

Oil: Crude oil rose towards $75 on Thursday, supported by falling stockpiles.

Gold: Prices climbed today as the Fed announced it would quicken the end of its pandemic support package. Spot gold XAU rose 0.5% to $1,784.97 per ounce by 09:41 UTC, while US gold futures GCV1 jumped 1.2% to $1,786.00.

Forex: The pound climbed 0.7% to $1.3352 against the dollar and was up 0.5% to £0.8464 versus the euro in the moments following the Bank of England’s decision at midday on Thursday.

AUD/USD

0.68 Price
+0.370% 1D Chg, %
Long position overnight fee -0.0062%
Short position overnight fee -0.0020%
Overnight fee time 21:00 (UTC)
Spread 0.00018

GBP/USD

1.30 Price
+0.550% 1D Chg, %
Long position overnight fee -0.0046%
Short position overnight fee -0.0036%
Overnight fee time 21:00 (UTC)
Spread 0.00110

EUR/USD

1.09 Price
+0.350% 1D Chg, %
Long position overnight fee -0.0086%
Short position overnight fee 0.0004%
Overnight fee time 21:00 (UTC)
Spread 0.00040

USD/JPY

157.98 Price
-0.580% 1D Chg, %
Long position overnight fee 0.0112%
Short position overnight fee -0.0194%
Overnight fee time 21:00 (UTC)
Spread 0.090

Crypto: Ether increased by 5.64% and bitcoin rose by 2.06% today in afternoon trading.  

Things to watch this week

Boeing blow: Qantas (QAN) announced today that its preferred supplier will no longer be Boeing (BA) but the European plane manufacturer Airbus (AIR).

Read more: Bank of England raises base rate to 0.25%

Markets in this article

AIRfr
Airbus
133.49 USD
0.9 +0.680%
AIRfr
Airbus
133.49 USD
0.9 +0.680%
BA
Boeing Co (Extended Hours)
182.85 USD
-1.33 -0.720%
BA
Boeing Co (Extended Hours)
182.85 USD
-1.33 -0.720%
BTC/USD
Bitcoin / USD
58742.10 USD
1116.1 +1.940%

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
Capital Com is an execution-only service provider. The material provided in this article is for information purposes only and should not be understood as investment advice. Any opinion that may be provided on this page does not constitute a recommendation by Capital Com or its agents and has not been prepared in accordance with the legal requirements designed to promote investment research independence. While the information in this communication, or on which this communication is based, has been obtained from sources that Capital.com believes to be reliable and accurate, it has not undergone independent verification. No representation or warranty, whether expressed or implied, is made as to the accuracy or completeness of any information obtained from third parties. If you rely on the information on this page, then you do so entirely at your own risk.

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