Long-term U.S. Treasury yields have been soaring due to expectations of a first-rate hike from the Fed at the end of 2022, while the Bank of England indicated such rate hike could happen as early as 2021, as it predicts U.K. inflation could peak at over 4% this year.
To add to this, yesterday's flash PMIs for September all pointed to a slowdown in economic activity, hampered by surging energy prices and shortages.
Meanwhile, also on investors’ radar, Sunday's election Germany, which might change EU policy in the years to come.
Among stocks, AstraZeneca gained 2.7% after trials of its prostate cancer drug Lynparza showed positive results. Mitie Group also rose 3.2% after it raised its fiscal 2022 profit guidance. On the downside, Land Securities fell 0.9% after selling two retail parks for 54.3 million pounds.
Also today, the U.K. Competition and Markets Authority announced that it investigating the acquisition of Quality Pet Care by CVS Group. It is also looking at whether CHC Group’s acquisition of Babcock International Group's oil-and-gas business would hurt competition.
Things to read:
Interest rates set to rise as soon as February amid inflation surge (Daily Telegraph)
Investors on watch for “political shift” after Germany’s election (Financial Times)
Investors Bet Environmental Fears Will Crunch Commodity Supply, Lifting Prices (WSJ)
Evergrande fallout could be worse than Lehman for China, warns Jim Chanos (Financial Times)