The bond market has been shattered by their sleep over the end of the summer and the big bank’s signals that interest rates are approaching, have led to lower prices since global debt began next year.
Investors have lost public funds following recent meetings at the US Federal Reserve and the Bank of England last week as they both expressed interest in tackling rising inflation rates by ending short-term borrowing costs.
At the same time, rising electricity prices in Europe – especially in the UK – have added to the confidence of managers to keep inflation longer than expected by central banks.
“Central banks have been trying to convince us that inflation is short-lived,” said Dickie Hodges, a manager of the bond Fund at Nomura Asset Management who has been trading against US Treasure. “Based on the situation I think they have been refusing – if you could show me one thing that is cheaper today than the plague was it would be a surprise. That’s why I think the re-enlightenment is gone.”
The stock market initially did not respond enthusiastically to reports last Wednesday that a number of Fed officials expect prices to rise next year, as the US central bank said it could “move forward” with plans to reduce its November bond purchases.
But a hawkish shift from the BoE the next day – with the UK’s largest bank predicting a rise in less than a year – has brought sales that are spreading rapidly in global markets and will continue this week, pushing for higher yields.
“Long-term volatility in economic yields is often stabilized around the world. We do not consider it a coincidence that the Hawkish Bank’s meeting in England was accompanied by a sharp rise in prices,” said Kelsey Berro, chief financial officer at JPMorgan Asset Management.
On Tuesday, US economy yields for 10 years, equivalent to the global economy, rose to 1.55%, the highest level since June and the lowest rise from 1.31% a week earlier.
The move to the UK has been particularly risky, with 10-year yields growing above 1% for the first time since March last year, more than twice the number of groups changed at the end of August. Even the eurozone, where the highest interest rate is at a distance, has not been saved. Germany Bund’s 10-year yields rose on Tuesday to a three-month low of 0.17%.
The fall in bond prices means that the Barclays Global Aggregate bond index – the world’s largest corporate and government debt – has fallen by almost 1.6% in September, the biggest drop since March.
Following the magic of the “business advisor” hedge funds sold about $ 81bn to Treasure Holdings last week when they made a bet on the market, according to Citi experts. After several months of prolonged labor on interest rates around the world, the stakes are low.
Proponents of her case have been working to make the actual transcript of this statement available online.
“For the past year we have expected the BoE to raise prices earlier than market expectations, and even ahead of the Fed,” said Sandra Holdsworth, UK’s head of pricing at Aegon Asset Management. However, the BoE’s statement last week that prices could rise before its end-of-year business plan was “a big surprise”, he said.
In a statement issued Monday evening, BoE CEO Andrew Bailey did not try to back down against market expectations for a month-long increase in February, sparking new sales. The increase to 0.25% by December is seen as a throwback to futures markets.
Holdingworth thinks that unless the increase in the virus leads to a new closure, or the end of a government plan to disrupt growth, even a rise in November is possible.
In Europe debt lending is due to high expectations of long-term economic growth, which undermines the stable interest rate offered by bonds.
Expected projections for retail prices within the second half of the next decade have risen to 3.85% in the UK, which has been the highest for 12 years. The corresponding average euro customer price rate is six years old at 1.81 percent.
Fed currencies US economic growth prospects they have been increasing. In a statement issued last week’s meeting, Fed officials saw a sharp rise in prices at 3.7% in 2021, up from a 3% increase in June. Next year, the Fed sees a decrease of 2.3%, against a recent estimate of 2.1%. Chairman Jay Powell speaking at Congress Tuesday said inflation could be high over the long term, especially if the economic crisis continues.
Rising inflation in Europe, the UK and the US could continue to rise with inflation. Brent crude, oil all over the world, Tuesday rose above $ 80 jars for the first time in more than three years. Some of the products including coal, carbon and oil prices in Europe are all coming to a head.
Mike Riddell, history manager at Allianz Global Investors, said: “The world’s largest producer of global harvesting seems to be a growing electronics crisis.”
“It would not be logical at once, because the electricity crisis should be small to minor, and it should not cause major interest rates to the central bank. [bond yields]. ”