Signs of stress emerged in the interest-rate swaps market and a leveraged-buyout deal was shelved. US Treasuries pared earlier losses, with the 10-year yield hovering around 3.76%.
In Europe, UK gilt yields rose after Prime Minister Liz Truss’s defence of unfunded tax cuts that sent markets into turmoil failed to persuade investors. German inflation topped 10% and the country agreed to energy caps that could add to inflationary pressures. Investors are grappling with threats posed by discordant moves from central banks over the past few days, with Fed officials adamant on further monetary tightening, the Bank of England unveiling a plan to support government debt and authorities in Asia trying to prop up weakening currencies.
“I was actually really surprised by the impact that the Bank of England had on the global market,” said Fiona Cincotta, senior financial markets analyst at City Index. “Yet, it was short-lived, the relief rally. We sort of pushed past that quite quickly and it seems to be back to that narrative of inflation fears, higher-interest-rate fears.”
Fed officials haven’t shied away from warning that more rate-hike pain is yet to come, with Cleveland Fed president Loretta Mester
The United Kingdom is begging for aid from India. Have you written about this? Reuters did so. How shameful
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