European government bonds knocked by inflationary pressures


European stocks softened on Monday and government bonds fell. Rising gas prices exacerbated inflation doubts ahead of US consumer price data later in the week.

The regional Stocks Europe 600 stock index fell 0.4% in early trading, more than 4% below the all-time high reached in late August before the rise in energy prices shined. Rebound of revenue From last year’s eurozone recession. The London FTSE 100 traded flat.

European gas contracts delivered in November rose 7.5% to € 90 per megawatt hour, below a record high of € 117.5. Hit last week Before Russia’s President Vladimir Putin signals that the country can increase its supply.

Brent crude, the international oil benchmark, rose 1.4% to $ 83.5 a barrel, the highest in three years.

Yields on UK 10-year bonds, which are inversely proportional to price and serve as a benchmark for national borrowing costs, rose 0.06% to 1.215%, the highest since May 2019.

Sterling rose 0.3% against the dollar to $ 1.365 as traders bet at the Bank of England to raise interest rates and tackle rising energy costs, in addition to labor shortage inflation pressures reported by the labor market. became Deadline on Tuesday Let me explain in more detail.

Economists surveyed by Reuters said consumer prices in the US in September rose 5.3% from the same period last year, marking the world’s largest economic headline inflation of 5 for the fourth straight month, according to data released Wednesday. Expected to exceed%.

Investors scrutinize third-quarter earnings reports from major U.S. banks and consumer companies such as Delta Airlines and Walgreen Boots this week, and high energy prices and pandemic supply chain bottlenecks add to corporate costs Look for clues about the impact. Personal consumption.

“The big issue this week is not only inflation, but also the level of cost that companies can now pass on to consumers,” said Annieka Gupta, research director at ETF provider Wisdom Tree.

“The risk is that the profit cycle is compromised,” she added, while rising prices made the US and eurozone central banks worried about maintaining record low interest rates.

Germany’s 10-year bond yield rose 0.02 percentage points to minus 0.126 percent, the highest since May. Equivalent French yield added 0.05 percentage points to 0.209 percent.

In Asia, Hong Kong’s Hang Seng Index rose 1.9% as investors wanted the Beijing government to ease regulatory crackdowns on the sector. It was driven by Chinese technology stocks.

China’s antitrust regulators fined online food delivery group Meituan Rmb34bn ($ 530 million) last Friday for abusing its position in the market.However The penalty was low More than analysts expected.

The futures market showed that the S & P 500 Index fell 0.3% in early New York trading, while the technology-intensive Nasdaq Composite fell 0.45%. The US bond market was closed due to Columbus Day.

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