Trump’s statement pushed the stock market down – the rise in oil prices again fuels expectations of an increase in key interest rates

President of the United States Donald Trump commented at the NATO summit in Ankara, Turkey, that peace talks with Iran “are dead.”

“Negotiations are dead. I don’t want a deal with them anymore. They are sick people,” Trump commented.

The drastic statement was immediately reflected in the market.

The price of Brent reference oil had accelerated to an increase of more than five percent to 78.11 dollars per barrel. The stock market also reacted. In Helsinki, the general index OMX Helsinki’s decline deepened to 1.4 percent from the approximately 0.7 percent decline before the statement. The decline in the European-wide Stoxx 600 index also deepened to around 1.6 percent.

The upward pressure on the price of oil raises the shares of energy companies. Neste’s share price is up 2.7 percent.

The future of the S&P 500 index, which tracks the US stock market, was down 1.6 percent at 11:40 am.

The situation in the oil market affects the inflation outlook and therefore the interest rate market has reacted strongly. The price of Germany’s 10-year reference bond is up 6.2 basis points at 3.053 percent. The two-year interest rate is 7.7 percentage points higher at 2.656 percent. The two-year interest rate rose to its highest level in about a month. In the derivatives market, bets on the central bank’s rate hikes have increased. Expectations about the ECB’s interest rate by the October meeting have returned.