Today's financial news

Tuesday 11th July

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A steady optimism within markets as more interest rate pauses are on the horizon

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Markets pick up

Markets showed small signs of optimism on Monday after a tough previous week, with the S&P 500, Eurostoxx 50 and Asian markets closing the day firmly in the green. UK unemployment figures showed an increase in jobless individuals, which is the news most economists globally are looking for as they seek to tame inflation. With inflation figures due in the US tomorrow, the markets are poised for further positive news. 

Interest rate pauses

For the past year, most central banks have been aggressively raising interest rates in a desperate attempt to control the rampant inflation that’s sweeping the globe. The US made ripples when they decided to pause their interest rate raises last month, albeit cautioning that further interest rate hikes are likely to be needed before the end of the year. Australia and Canada followed suit last week, who also proceeded to pause interest rate hikes. A decision from the Royal Bank of New Zealand on their interest rates is expected today, with most forecasting a similar pause, leaving it at one of the highest levels amongst developed nations at 5.5%. 

Fisker’s convertible bond

The electric vehicle (EV) maker, Fisker, announced that it would sell $340 million of convertible bonds to raise cash yesterday, which caused their share price to soar. A convertible bond allows the buyer to convert to a set number of shares at some point in the future. Whilst the EV market is notoriously difficult to break into, given the relative monopoly that Tesla seems to have commanded, it is hoped that this convertible bond will boost their ability to produce vehicles and in turn boost their share price, which is down 15% for the year. 

Sources: IG, Nasdaq, Investopedia, Reuters, Techcrunch, Yahoo Finance

Zoe Burt