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ECB shock markets with 50 basis points rate hike

The ECB increased interest rates for the first time in over a decade on Thursday, as the bank continued its battle with rising inflation.

Europe’s Central Bank opted to raise interest rates by 50 basis points, doubled the amount markets had predicted.

In a statement following the announcement, the bank stated, “The Governing Council judged that it is appropriate to take a larger first step on its policy rate normalisation path than signalled at its previous meeting”.

Inflation continues to rise at historic levels, and after holding fire for several months, the bank’s policy change was a welcomed surprise to markets.

This comes less-than a week after EURUSD hit parity for the first time in over a decade.

Oil price drops below $100 per barrel

 Oil prices were trading lower for a second consecutive session, with today’s decline taking WTI below $100 per barrel.

The selloff comes as oil stockpiles in the United States unexpectedly rose in recent weeks, despite best efforts of President Biden to release reserves.

Since July 8th, there has been a build-up of just over 9 million barrels of crude, which comes as summer demand for energy slows.

This comes as Russia resumed its Nord Stream gas flows with Germany, despite recent calls for further sanctions.

As of writing, WTI crude is trading at $98.80.

Tesla stock higher, following Q2 earnings call

Tesla stock was trading higher on Thursday, as markets continue to react to the company’s Q2 earnings call.

After yesterday’s closing bell, Tesla reported that earnings in the second quarter were better than expected, coming in at $2.27 per share.

Markets were anticipating that earnings would come in at $1.81 per share for the quarter, as a result of increased costs in production.

Revenue for the quarter was reported at $16.93 billion from $18.76 billion a quarter earlier, and lower than estimates of $17.10 billion for Q2.

The company also confirmed it had sold 75% of its bitcoin holdings.   

All of this news resulted in a 9.78% jump to $815.12 per share.

“Investing is the intersection of economics and psychology.”

– Seth Klarman.