U.S. Commerce Secretary Gina Raimondo said on Wednesday a Chinese invasion of Taiwan and seizure of chips producer TSMC would be “absolutely devastating” to the American economy. Declining to comment on how or whether it would happen, she told a U.S. House hearing that the United States buys 92% of its leading edge chips from TSMC.
Intel, meanwhile, fell more than 2% on Wednesday after warning of a sales hit from the U.S. revoking some of the chipmaker’s export licences for China.
It has been a bumpy week within the tech sector more generally. Arm Holdings dropped 10% in out-of-hours trade overnight after a full-year revenue forecast missed expectations.
Wall St stock futures were off slightly ahead of Thursday’s open, Treasury yields were a touch higher and the dollar was firmer too.
Wednesday’s 10-year Treasury auction was a little tepid and bond investors now await $25 billion of new 30-year bonds later on Thursday.
Fed officials continue to sound cautious – though downplaying any need to raise interest rates again. Boston Fed President Susan Collins said the current setting of monetary policy would slow the economy in the way she said was necessary to get inflation back to the Fed’s 2% target.
Back in Europe, the Bank of England decision is in focus and sterling is on the backfoot amid speculation that steady rates today may be accompanied by signals that the Bank is prepared to ease alongside the European Central Bank as soon as next month.
And in deals, Spanish bank Sabadell jumped 6% after rival BBVA presented a 12.23 billion euro takeover bid directly to shareholders, even though the former’s board already rejected the proposal. BBVA shares were down 5.4%.
