UK bond yields set at record monthly high
A Reuters analysis has found that UK government bond yields are on track for the biggest monthly rise recorded in Refinitiv and Bank of England data going back to 1957.
The yield on the 10-year Treasury rose 131 basis points so far in September, with heavy selling Intensification Friday after the government announced extensive tax cuts. Yields move inversely to prices.
“the speed [of gilt yield rises] It was eye catching. We haven’t seen such moves since the financial crisis,” Craig Inches, head of interest rates and cash at Royal London Asset Management, told CNBC’s Squawk Box Europe.
“The problem you have now is that the markets are very weak, liquidity is very low, and you have a lot of market participants stuck in long positions. There have been many people who have tried to contact the top position in the interest evaluating the profile and they have been suspended from the markets,” he said.
UK economy: ‘Something has to break’, says bank CIO
With the pound sterling falling against the dollar, Hit record low In the early hours of Monday morning, the UK was in a situation where “something has to break”, according to Fahad Kamal, CIO at Kleinwort Hambros.
“The pound is something that seems to be taking a lot of pressure right now,” Kamal told CNBC’s “Squawk Box Europe.”
And lower energy prices also won’t lower inflation anytime soon, according to the chief information officer.
“The lower price of oil will help, but in the end inflation just exceeded oil and commodity prices, it is much deeper, more entrenched and linked to things like rent and wages,” Kamal said.
– Hannah Ward Glinton
German business sentiment declines in September
German economic sentiment deteriorated rapidly in September, according to the latest ifo survey.
The Ifo business climate index fell to 84.3 points this month, its lowest level since May 2020 and down from 88.6 points in August.
“The downturn affects all four sectors of the economy. Companies rate their current business as clearly worse,” said Clemens Fest, president of the ifo institute.
“Pessimism about the coming months has flatly grown; in retail, expectations have fallen to a record low. The German economy is slipping into recession.”
– Elliot Smith
Brent crude drops below $85 a barrel as the dollar rises
Brent crude fell below $85 a barrel on Monday, as recession fears escalated and U.S. dollar soared.
Brent crude futures contracts As for the November settlement, it was trading down more than 1% around $84.92 at 8am London time. West Texas Intermediate crude futures also fell to trade around $77.93.
You can read the full story on CNBC over here.
– Hannah Ward Glinton
Stocks on the go: Belimo up 7%, K+S down 8%
Shares of Swiss heating and ventilation manufacturer Belimo Holding rose more than 7% in early trading after Berenberg upgraded the stock to “buy” and raised its price target, citing increased demand for home renovations.
At the bottom of the Stoxx 600, German chemical company K+S fell 8%.
– Elliot Smith
Opinion polls show Giorgia Meloni and her far-right Brothers of Italy party lead in Italian elections
Giorgia Meloni was seen speaking during the campaign. Giorgia Meloni, leader of the Italian nationalist Brotherhood party and right-wing conservative, organized the crucial electoral rally in Arenel, in the left-leaning Bagnoli district, Naples.
soba pictures | Light Rocket | Getty Images
Italians are on their way to electing the country’s first female prime minister and the first far-right government since the end of World War II.
Georgia Meloni’s Fratelli d’Italia (Brothers of Italy) party is set to receive 26.4% of the vote, according to a poll Monday exiting the polling station. The party is in a broad right-wing alliance with Lega, led by Matteo Salvini, Forza Italia led by Silvio Berlusconi, and a secondary coalition partner, Noi Modrati.
This alliance is set to win 44.43% of the vote, according to opinion polls, which is enough to obtain a parliamentary majority with the center-left bloc at 26.57%. Early predictions of actual election results are due Monday morning.
Sterling hit a record low against the dollar, with Asia-Pacific currencies also weakening
CNBC Pro: Morningstar reveals its high-earning global stocks — and gives three up 30%
Morningstar revealed its pick of the world’s highest-yielding stocks, saying it stands out in an environment where many companies may not be able to maintain their profits due to “economic stress.”
– Ganesh Rao
CNBC Pro: Dan Niles predicts when the S&P 500 may dip, reveals how it has benefited this year
Stocks are preparing to test their lowest levels in the last week of trading for September
Heading into the last week of trading for September, the Dow and S&P 500 are down about 6% for the month, while the Nasdaq is down 8%.
Dow Jones and Standard & Poor’s now stand at 1.2% and 1.6%, respectively, above their lowest levels since mid-June. The Nasdaq is 2.9% above its lowest level.
European markets: here are the opening calls
European shares are expected to open their doors in negative territory on Wednesday as investors react to the latest US inflation data.
The UK FTSE is expected to fall 47 points at 7341, the German DAX 86 is down at 13106, the French CAC 40 is down 28 points, and the Italian FTSE MIB is down 132 points at 22010, according to data from IG.
Global markets fell after a higher than expected US Consumer Price Index The Bureau of Labor Statistics reported Tuesday that an August report that showed prices rose 0.1% for the month and 8.3% annually in August, defying economists’ expectations that headline inflation will fall 0.1% on a monthly basis.
Core CPI, which excludes volatile food and energy costs, rose 0.6% from July and 6.3% from August 2021.
UK inflation figures are due for August, and Eurozone industrial production for July will be published.
– Holly Eliat