An analyst says the UK is in a pandemic-style easing phase, without pandemic-style monetary policy
Market players may underestimate how an oversupply of British bonds will affect them, according to Imogen Bachra, head of UK price strategy at NatWest.
“Even if the Bank of England did not sell its business back to the market, the mere fact that it did not buy bonds is a huge turning point in the face of all this supply,” she said.
“This is pandemic-style easing, but without pandemic-style balancing monetary policy in which the Bank of England has been buying essentially all of the bonds the Treasury has been issuing.”
She also said she believes returns will continue to rise. The yield on the 10-year gold treasury rose to levels not seen since 2008 on Monday.
Stocks on the go: Wise 7% up, Vitrolife down 20%
London-based fintech stocks wise It rose 7% to lead the Stoxx 600 through early afternoon trades after Morgan Stanley raised its target price for the stock from 570p per share to 700p.
At the bottom of the excellent European index, the Swedish IVF company vitrolife It fell more than 20% after Bank of America began covering the stock with a “underperforming” rating.
– Elliot Smith
Investment manager says BoE is right to delay rate hike as pound drops
The British central bank should not be in a rush to raise interest rates, according to Julian Howard, chief investment officer at Multi Asset Solutions at GAM Investments, although declining pound.
“I don’t think the BoE’s job is to support the pound,” Howard told CNBC’s “Squawk Box Europe” on Tuesday.
“I prefer framing this as a global phenomenon and I think the Bank of England should be late before raising rates any further,” he said.
He also said talk of the UK becoming an emerging market was “a bit premature”.
“Some have said we are becoming a Mediterranean country but without the weather – I think that’s too harsh,” Howard said.
– Hannah Ward Glinton
Stocks on the go: Nexi up 6%, Vitrolife down 9%
Involved Nixie It gained 6% in early trading to lead the Stoxx 600 after the Italian payments group published its new business plan, in which it expected an increase of 2.8 billion euros ($2.7 billion) in surplus cash generation between 2023 and 2025 for mergers and acquisitions and share buybacks.
At the bottom of the European index, Swedish IVF company Vitrolife fell more than 9%.
CNBC Pro: Here’s Where Dan Niles Puts His Money
“We made money today. We arrived in August. We’re up for the year,” fund manager Dan Niles told CNBC.
With major stock markets still pretty steep this year, the investing veteran shares what he’s buying in this volatile market.
Professional subscribers can read more.
– Xavier Ong
Fed’s Meester says it’s best to act ‘firmly’ against high inflation
Loretta Meester, president of the Federal Reserve Bank of Cleveland, said US inflation is “unacceptably high” and uncertainties make monetary policy decisions “non-trivial.” prepared notes at the Massachusetts Institute of Technology.
“When there is uncertainty, it may be better for policymakers to act more aggressively,” she said. “Aggressive and preventive measures can actually prevent the worst outcomes from happening.”
She said she would be “very cautious” when assessing inflation data.
“I would need to see several months of decline in monthly readings,” she said. “Wishful thinking cannot be a substitute for hard evidence.”
– Jie Lee
The World Bank has lowered its growth forecast for East Asia and the Pacific
The World Bank has lowered its full-year 2022 growth forecast for East Asia and the Pacific to 3.2% from its April forecast of 5%, the bank said in its latest release. Report Released Tuesday.
“The slowdown in growth is mostly due to China,” she said, adding that the organization also lowered its 2022 forecast for the nation to 2.8% from 5%. The World Bank expects China to grow by 4.5% in 2023.
Average headline inflation is expected to exceed 5% this year, the report said, an upward revision from the 3% previously projected in April.
– Jie Lee
CNBC Pro: Analysts Like Nvidia Again, With Citi Giving It Nearly 100% High
Analysts started to trend upwards again nvidiaafter the semiconductor giant lost its favourite amid geopolitical tensions and a slowdown in the chip sector.
Citi and JPMorgan said last week that strong demand for computer games, as well as adoption of cloud in data centers, were set to be a tailwind for Nvidia.
So how much upside did each of them give Nvidia stocks? CNBC Pro subscribers can read more here.
– Weezin Tan
European markets: here are the opening calls
European shares are expected to open their doors in negative territory on Wednesday as investors react to the latest US inflation data.
The UK FTSE is expected to fall 47 points at 7341, the German DAX 86 is down at 13106, the French CAC 40 is down 28 points, and the Italian FTSE MIB is down 132 points at 22010, according to data from IG.
Global markets fell after a higher than expected US Consumer Price Index The Bureau of Labor Statistics reported Tuesday that an August report that showed prices rose 0.1% for the month and 8.3% annually in August, defying economists’ expectations that headline inflation will fall 0.1% on a monthly basis.
Core CPI, which excludes volatile food and energy costs, rose 0.6% from July and 6.3% from August 2021.
UK inflation figures are due for August, and Eurozone industrial production for July will be published.
– Holly Eliat