Global bonds and stocks fall as inflation fears escalate: markets shroud – .

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Global bonds and stocks fall as inflation fears escalate: markets shroud – .


(Bloomberg) – Global bond yields rose and most stocks fell on Monday as surging energy prices raised concerns about inflation and heightened bets on tightening policy.
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U.S. index futures fell, while crypto and mining companies advanced in pre-market trading. Tesla Inc. has also increased. Meanwhile, consumer and retailer actions have led to drops in the Stoxx 600 in Europe, as luxury companies slide over concerns over Chinese tax laws. Stocks in Asia were mixed as the Chinese economy slowed in the third quarter.

The global bond sell-off has accelerated, with UK yields rising after Bank of England Governor Andrew Bailey warned of the need to respond to price pressures. Bets on rate hikes have also intensified in the United States, Australia and New Zealand, where inflation has accelerated at the fastest pace in 10 years. Ten-year Treasury bill yields extended their rise to 1.6%. The dollar gauge has risen.

Oil prices supported their eighth weekly gain, with West Texas Intermediate crude reaching its highest level since 2014. Brent approached $ 86 a barrel. Russia maintains a tight grip on the European energy market, choosing not to send more natural gas to the continent even after President Vladimir Putin has said he is ready to increase supply.

Investors continue to fear that energy shortages and supply chain disruptions will drive up the cost of living in most economies. At the same time, the recovery remains uneven and central bankers are moving closer to cutting stimulus. US consumer confidence unexpectedly fell in early October, but retail sales rose.

“We’re starting to see cracks in the transient narrative we’ve been hearing for some time,” Meera Pandit, global markets strategist at JP Morgan Asset Management, told Bloomberg Radio. “Rates will continue to rise from where we are. But I don’t think from the Fed’s point of view, when you think about the short end of the curve, that they’re going to move much sooner than in 2023. They’re going to be a little more patient than the market does. is currently waiting. “

Mohammed El-Erian, chief economic adviser to Allianz SE and Bloomberg columnist, said investors should prepare for increased market volatility if the Federal Reserve withdraws the stimulus measures implemented by the Covid pandemic. 19.

Meanwhile, Governing Council member Ignazio Visco said the European Central Bank should retain a high degree of flexibility in its post-crisis stimulus measures, including buying more debt issued by the European Union.

People’s Bank of China Governor Yi Gang said authorities can contain the risks posed to the country’s economy and financial system by the struggles of the China Evergrande group.

Elsewhere, Bitcoin rebounded from around $ 62,000 ahead of the expected debut of exchange-traded funds in the United States on Monday.

For more market analysis, read our MLIV blog.

Events to follow this week:

  • Profits are piling up, especially at AT&T Inc., Barclays Plc, Johnson & Johnson, Netflix Inc. and Tesla Inc.
  • Bank of Indonesia rate decision and briefing, Tuesday
  • China’s AFN Standing Committee begins a meeting on Tuesday, which will continue through October 23. A review of anti-monopoly regulations is on the agenda
  • Housing starts in the United States, Tuesday
  • EIA Crude Oil Inventory Report, Wednesday
  • China real estate prices, preferential loan rates, Wednesday
  • U.S. Conference Board leading index, U.S. existing home sales, jobless claims, Thursday
  • Fed Chairman Jerome Powell participates in policy roundtable on Friday

Some of the main movements in the markets:

Actions

  • S&P 500 futures fell 0.4% at 7 a.m. New York time
  • Nasdaq 100 futures fell 0.4%
  • Futures contracts on the Dow Jones Industrial Average fell 0.3%
  • The Stoxx Europe 600 is down 0.5%
  • The MSCI World Index rose 0.9%

Devises

  • Bloomberg Dollar Spot Index rose 0.2%
  • The euro was little changed at $ 1.1591
  • The British pound fell 0.2% to $ 1.3727
  • Japanese yen fell 0.1% to 114.34 per dollar

Obligations

  • The yield on 10-year Treasuries rose four basis points to 1.61%
  • German 10-year rate rose three basis points to -0.13%
  • UK 10-year yield rose five basis points to 1.15%

Merchandise

  • West Texas Intermediate crude rose 1.6% to $ 83.58 a barrel
  • Gold futures fell 0.4% to $ 1,761.90 an ounce

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