CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 82.67% of retail investor accounts lose money when trading CFDs. 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: ECB remains resolute as BoE raises rates

    By Jenny McCall

    14:06, 3 February 2022

    A picture outside the Bank of England Museum located within the Bank of England in the City of London
    Euro and sterling were weak against the dollar despite having different approaches to interest rates – Photo: Shutterstock.

    Key Points

    European Central Bank (ECB) kept policy unchanged, and remains resolute when it comes to interest rate hikes. 

    Shane O’Neill, head of interest rate trading for for Validus Risk Management, said: “After yesterday’s inflation print out of the EU, the highest recorded since the creation of the single currency, the pressure was on the ECB today. In line with market expectations, they have made no change to their policy and the associated statement is also virtually unchanged from a month earlier.”

    “Lagarde has been resolute in her stance that inflation in the bloc is transitory, but with central bankers around the world succumbing to inflationary pressures you must wonder – how long can she hold out?”
    • Today, the Bank of England announced that interest rates will increase to 0.5%.

    Giles Coghlan, Chief Currency Analyst at HYCM, said: “The Bank of England’s (BoE) decision to raise interest rates today was expected. Recent warnings that inflation could peak at close to 6% by April has the bank acting quickly to raise rates, while Goldman Sachs gave their BoE projections an upgrade this week, recognising that policymakers had their hands tied. This may well turn out to be the quickest interest rate move in 25 years, as the BoE know that this is the only weapon against surging inflation.”

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    Top business and economic news

    BBVA announced positive earnings news, becoming the latest bank to reveal a major boost to profits. It reported a €5.07bn (£4.2m, $5.7m) profit in 2021, the highest in the past 10 years.

    EUR/USD

    1.05 Price
    -0.590% 1D Chg, %
    Long position overnight fee -0.0080%
    Short position overnight fee -0.0002%
    Overnight fee time 22:00 (UTC)
    Spread 0.00006

    USD/JPY

    154.60 Price
    -0.530% 1D Chg, %
    Long position overnight fee 0.0083%
    Short position overnight fee -0.0165%
    Overnight fee time 22:00 (UTC)
    Spread 0.010

    GBP/USD

    1.26 Price
    -0.420% 1D Chg, %
    Long position overnight fee -0.0039%
    Short position overnight fee -0.0043%
    Overnight fee time 22:00 (UTC)
    Spread 0.00013

    GBP/JPY

    194.76 Price
    -0.950% 1D Chg, %
    Long position overnight fee 0.0085%
    Short position overnight fee -0.0167%
    Overnight fee time 22:00 (UTC)
    Spread 0.036

    Figures tracking the US labour market were announced today by Oxford Economics: new claims for unemployment benefits have fallen as Covid infections subsided. Continued claims for regular benefits fell 44,000 to 1.63 million in the week ended 22 January.

    Markets today

    • Stocks: Meta, formally known as Facebook (FB), stock price fell today by over 20%, causing US stock index futures to slump.
    • Oil: oil prices were down today, following OPEC+ decision for a March output raise.
    • Gold: gold prices eased today, due to a strengthened US dollar and Treasury yields gained.
    • Forex: inflation pressures caused the euro and the sterling to weaken today.
    • Crypto: Bitcoin fell by over 4% and Ethereum was down by over 5% today in afternoon trading.

    What to watch today

    Markets in this article

    TSLA
    Tesla Inc (Extended Hours)
    342.02 USD
    -0.28 -0.080%

    Related topics

    #Dollar (USD) #EUR #Gold #Oil #Ethereum #GBP #Earnings #Forex #Bitcoin

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    Related reading

    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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