Federal Reserve officials raised interest rates for the first time this year by 0.25 percent. The Fed also forecast a steeper path for borrowing costs in 2017 and suggested that the labor market is tightening as inflation expectations have increased “considerably”. The Federal Open Market Committee increased its benchmark rate a quarter percentage point and explore the prospect of three more hikes in US interest rates next year sending the dollar to a 14-year high and causing a major selloff on most Asian markets. The dollar was last seen trading at record highs against the Japanese yen at 118.33 JPY as of 10:50 GMT.
Retail sales volumes increased by 0.2% in November, and were 5.9% higher than a year earlier. Non-food sales were particularly strong while in the latest month growth continues to be driven by a broad increase in all 4 categories. It is worth noting however that petrol provided the lowest contribution to growth since November 2014, which could be caused by the recent rises in petrol prices which have forced some drivers to cut back. The highest contribution to growth was non-food stores, contributing 2.1 percentage points to growth, perhaps as consumers sought to snatch Black Friday deals.
European markets headed higher on Thursday just a day after the U.S. Federal Reserve announced a 25 basis point rate increase and suggested that there would be an additional three hikes next year. The announcement of the rate hike sent the dollar to 14-month highs. The dollar was the sole beneficiary of the Federal Reserve’s first and only interest-rate hike of 2016, as both Europe and Wall Street to closed lower yesterday. European equities climbed while bonds slumped today. Indicatively, Germany’s DAX was last seen trading 0.6 percent higher at 11308.00, U.K.’s FTSE 100 was flat at 6948.50, France’s CAC 40 added 0.8 percent to last trade at 4806.50 while the Euro Stoxx 50 was last seen trading 0.7 percent higher at 3239.50 as of 10:51 GMT.
Yahoo disclosed yet another security breach “likely different” from the one it disclosed in September and warned that it may affect more than a billion user accounts. The company received information from law enforcement last month about files that a third party had managed to acquire Yahoo data. The data was analyzed by the forensic experts while Yahoo believes an unauthorized third party, stole data associated with more than one billion user accounts in August 2013. The company also believes this that incident is likely distinct from the incident the company disclosed on Sept. 22, 2016. The breached information may include names, e-mail addresses, phone numbers, dates of birth, hashed passwords and even some security questions and answers.