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Pound Pound Rises, Stock Futures Rise on Speculative BOE: Market Ends


(Bloomberg) – The dollar pared gains and the pound turned higher after a report raised the prospect of the Bank of England extending its emergency bond-buying. US futures rose, while European and Asian stocks fell.

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The Financial Times reports that the BOE told lenders it was prepared to extend its emergency bond-buying program past the October 14 deadline to avert the UK pension crisis. The conversations come before Governor Andrew Bailey announced on Tuesday the end of scheduled purchases.

Meanwhile, hen prices fell after a report showed the UK economy unexpectedly shrank in August for the first time in two months, raising the possibility that the country is slipping into a recession. Most European bonds also fell, while 10-year Treasury yields fell after closing at a one-decade high on Tuesday.

Unsettled market performance on Wednesday captured the greenback’s rally while the yen remained around levels it previously caused intervention as investors braced for higher US rates. while the Bank of Japan applies extremely easy policy.

Investors were scouring earnings and data for clues about Federal Reserve policy as US President Joe Biden said a recession was possible.

Citigroup Inc. economist Veronica Clark. “I haven’t seen any imbalances that could cause a turnaround from the Fed,” said. “The Fed will pay attention to concerns about global financial stability, a strong dollar is part of that, but ultimately it will be domestic conditions and what the Fed is seeing in terms of inflation.”

Kristina Hooper, global market strategist at Invesco, said in a note that while the world economy is slowing following the rate hike, there hasn’t been a significant drop in inflation. “This is an extraordinary monetary tightening environment and we are waiting to see if something breaks globally,” she said. “The UK has come close.”

Elsewhere, gold and oil prices rose.

Russian President Vladimir Putin threatened more missile strikes on Ukraine after hitting Kyiv and other cities in the heaviest air strikes since the first days of the invasion.

This week’s main events:

  • Earnings for this week include: JPMorgan Chase & Co., Citigroup Inc., Morgan Stanley, BlackRock Inc., Delta Air Lines Inc., UnitedHealth Group Inc., US Bancorp, Wells Fargo & Co.

  • FOMC Minutes for September, Wed

  • US PPI, Mortgage Application, Wednesday

  • OPEC Monthly Oil Market Report, Wednesday

  • Fed’s Michelle Bowman and Neel Kashkari speak

  • Christine Lagarde of the ECB speaks

  • US CPI, Initial Jobless Claims, Thursday

  • G-20 central bank and finance ministers meet, Thursday

  • China CPI, PPI, trade, Friday

  • US Retail Sales, Business Inventory, University of Michigan Consumer Sentiment, Friday

  • BOE emergency bond purchase ends on Friday

Some key moves in the market:

Inventory

  • Stoxx Europe 600 down 0.3% at 8:20 a.m. London time

  • S&P 500 futures rose 0.6%

  • Nasdaq 100 futures rose 0.8%

  • Futures on the Dow Jones Industrial Average rose 0.5%

  • MSCI Asia Pacific Index down 2.2%

  • The MSCI Emerging Markets Index fell 2.3%.

Currency

  • Bloomberg Dollar Spot Index was little changed

  • The euro was little changed at $0.9714

  • Japanese yen fell 0.2% to 146.11 per dollar

  • The offshore yuan was little changed at 7,1710 per dollar

  • British Pound rose 0.4% to $1.1016

Electronic money

  • Bitcoin up 0.6% to $19,141.51

  • Ether up 1.2% to $1,296.83

Bonds

  • Yields on 10-year Treasury notes fell three basis points to 3.92%

  • German 10-year yield rose three basis points to 2.33%

  • UK 10-year yield rose three basis points to 4.47%

Goods

  • Brent crude rose 0.3% to $94.57 per barrel

  • Spot gold rose 0.2% to $1,669.43 an ounce

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