FINANCE

Stocks and bonds have lifted inflation expectations as gas prices have risen


Rising fuel prices on Wednesday exacerbated inflationary pressures, dragging down government bond prices and hitting stocks.

A major gas deal in the UK rose nearly per cent, Europe’s Stocks share00 stock index fell 1.4 per cent, pushing regional benchmarks to their lowest level since July 20. Decreased by 1.4 percent

Futures markets indicate that sales on Wall Street stocks will increase as the S&P 500 contracts fall 0.9 percent, as rising electricity prices will offset the gains of inflation-reducing companies, curbing consumer spending and pushing the central bank closer. Repetition in policies.

Sterling was down 0.6 percent against the dollar, trading at 35 1.3587 before a slight recovery, as a gauge measuring the expected volatility in the currency next month reached its highest level since early March. The dollar index, measuring the currency against six others, added 0.4 percent, trading near a one-year high.

The UK gas contract for November delivery rose more than 4 4 on Wednesday, almost 10 times the level they traded at earlier this year.

Instead, market expectations for UK inflation have reached their highest level since 2008, as investors bet that raising fuel bills could trigger a broader price rise wave across the economy.

The ten-year hiatus এমনকি even inflation পরবর্তী has raised the gauge above -4 percent, closely monitoring investors ’expectations for retail inflation in the next decade.

“The market sentiment at the moment is terrible,” said Patrick Spencer, RW Baird’s equity vice-chairman. “It’s a wall of concern, driven by inflation.”

Anna Stupnitska, global macroeconomic economist at Fidelity International, said: “The main theme is trying to understand the markets.

He said investors had already expected some moderation in economic growth from the epidemic-driven bottom of 2020. “But we think the recession is going to be much sharper than expected because of the global power crisis.”

Inflation in the United States has been above 5 percent for three consecutive months and reached a two-year high in Germany last month, putting pressure on the central bank to tighten monetary policy introduced in early 2020.

Fixed interest payments on bonds are seen as less attractive due to inflation concerns and the central bank’s firmness.

The UK’s 10-year gilt yield rose to 1.13 per cent, the highest level in nearly two and a half years, before falling to 1.11 per cent. Bond yields go in the opposite direction of prices.

Germany’s 10-year bond yield reached a four-month high of minus 0.16 percent, before falling to minus 0.18 percent, while the yield on 10-year U.S. Treasury notes reached 1.57 percent, a three-month high, then declining to 1.55 percent.

The UK is particularly prone to stagnation due to Brexit-related supply chain disruptions, rising energy bills and labor shortages.

“It’s hitting the pockets of customers, and you’re probably raising mortgage costs by the end of this year before you go to the Bank of England. That seems like a step towards stagnation,” said Mark Dowding, chief investment officer at BlueBe Asset Management.

International oil benchmark Brent crude fell 0.8 percent to 81 81.86 a barrel, boosting concerns about inflation by nearly 5 percent last week after rising demand for natural gas.



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