Treasury yields rise as investors weigh geopolitical tensions and economic data
U.S. Treasury yields moved higher on Wednesday as investors considered the geopolitical situation and assessed the latest economic data.
2:58 a.m. ET, yields 10-Year Treasury Bond It rose more than four basis points to 4.4178%. this 2-Year Treasury Bond After the yield increased by more than two basis points, the latest trading price was 4.2932%.
Yield and price move in opposite directions, with 1 basis point equal to 0.01%.
——Sophie Kidlin
What does UK inflation data mean for rate cuts?
Analysts pointed out that Britain’s inflation rate rose sharply to 2.3% in October due to rising energy prices, which means that the Bank of England (BOE) may adopt a more gradual approach to interest rate cuts. They said on Wednesday the data could close the door to a rate cut in December:
“Going into winter, service sector inflation will rebound by about 5%, while overall CPI in January is likely to be close to 3%. This reduces the possibility of a rate cut in December, but we think there is still a good chance in the spring ING Developed Market Economists James Smith said the Bank of England will accelerate its easing cycle and predicted a pause at next month’s BoE meeting.
Sanjay Raja, chief UK economist at Deutsche Bank Research, said the latest inflation report “will not be that encouraging to the Bank of England, who have been talking about a gradual easing of restrictive policies.” He It said the central bank may “adopt a more gradual and cautious path of interest rate cuts. At present, upward pressure on price momentum will increase.”
Shoppers walk through the ornate Burlington Arcade luxury shopping mall on December 4, 2023 in London.
Bloomberg | Bloomberg | Getty Images
Kris Hamer, insights director at the British Retail Consortium, commented that the retail industry needs more help from the government as it prepares for the additional cost pressures brought about by changes to the UK budget, including increases in employer payroll tax and minimum wage.
“For an industry already operating on razor-thin margins, these new costs will inevitably lead to higher prices. If retailers try to limit the impact on customers, there is also the risk of job losses and store closures. If the government wants to prevent a return to Qualcomm Expansion, consideration needs to be given to mitigating the impact of these costs on retailers,” Hamer said.
— Holly Elliot
UK inflation picks up in October
A shopper browses fruits and vegetables for sale at an indoor market in Sheffield, England. The OECD recently predicted that Britain would have the highest inflation rate of any developed economy this year.
Bloomberg | Bloomberg | Getty Images
Data released by the Office for National Statistics on Wednesday showed that the British inflation rate rose sharply to 2.3% in October, higher than expected.
The rate hike was a sharp increase from September’s 1.7% rate and exceeded the 2.2% forecast by economists polled by Reuters.
Core inflation (excluding energy, food, alcohol and tobacco) was 3.3% this month, slightly higher than September’s 3.2%.
Read more about this story here: UK inflation surged to 2.3% in October, higher than expected
— Karen Gilchrist
CNBC Pro: Burberry shares fell 40%. One hedge fund manager says the stock is a ‘good value’ right now
Is it time to bargain-hunt luxury retailers? Burberryshares?
The London-listed fashion company told investors earlier this month that as Comprehensive renovation plan revive its poor fortunes.
Hedge fund manager David Neuhauser made the point this week on CNBC’s Squawk Box Europe.
CNBC Pro subscribers can read more here.
— Ganesh Rao
CNBC Pro: Three global stocks worth owning in 2025, says Barclays
Barclays said the outlook for the stock market looks “good” heading into 2025 as central banks cut interest rates and the global economy remains resilient.
The bank named it “an overweight stock that our analysts have high confidence in 2025 and see value as a personal holding.”
CNBC Pro subscribers can read more here.
— Amala Balakrishna
European Markets: Here are the opening calls
European markets are expected to open higher on Wednesday.
British FTSE 100 The German stock index is expected to open 4 points higher at 8,106 German DAX Index France rises 46 points to 19,108 CAC Up 23 points to 7,252 points, Italy FTSE MIB It rose 118 points to 33,567, according to IG data.
Proceeds will come from Severn Trent and British Land. The data release includes UK inflation data.
— Holly Elliot
