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European markets close slightly higher; The Bank of England intervenes in the bond market

European markets close slightly higher;  The Bank of England intervenes in the bond market
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European stocks close slightly higher

The pan-European Stoxx 600 finished 0.3% higher provisionally, recovering from losses of 2% in morning trade and a choppy afternoon.

Britain’s FTSE 100 rose 0.3% after the Bank of England announced it would temporarily buy long-dated bonds and suspend selling of gilts next week.

The UK bond market has seen an historic sell-off and the pound has fallen to historic lows against the US dollar as traders expressed dislike of a ‘mini budget’ announced on Friday.

Germany’s DAX closed 0.9% higher, while France’s CAC 40 gained 0.2%.

– Jennie Reid

Stocks on the move: Thyssenkrupp down 11%, Hikma up 8%

Shares in German multinational conglomerate Thyssenkrupp fell 11% through the afternoon after JPMorgan resumed its coverage of the stock with an “underweight” rating.

At the top of the European blue chip index, Britain’s Hikma Pharmaceuticals was up more than 8% through the afternoon session.

-Elliot Smith

Sterling slips after Bank of England intervention in bond markets

Sterling fell 1.4% against the dollar on Wednesday, falling below $1.06 after the Bank of England intervened in the UK bond market to calm recent market turmoil caused by the so-called “mini-budget”. triggered by the new government.

The bank announced on Wednesday that it would suspend the scheduled start of its gilt sales next week until October 31 and temporarily buy long-dated bonds until October 14, in an emergency program backed by the UK Treasury.

-Elliot Smith

All indicators point in the wrong direction: WTO head

Ngozi Okonjo-Iweala, Director General of the World Trade Organization (WTO), speaks during the Clinton Global Initiative (CGI) Annual Meeting Monday, September 19, 2022 in New York.

Michael Nagel | Bloomberg | Getty Images

The global economy is slowing significantly and could be headed for a recession, World Trade Organization director-general Ngozi Okonjo-Iweala told CNBC’s Julianna Tatelbaum.

“My concern is that all the indicators are going in the wrong direction,” Okonjo-Iweala said at a WTO event in Geneva.

She pointed to the recently downgraded global growth forecasts by the IMF, World Bank and OECD. She added that purchasing managers’ indices had cooled and ocean freight rates had fallen, which “could be a fall in demand that points to something unwelcome.”

– Jennie Reid

EU pledges firm response to alleged sabotage of Nord Stream gas pipelines

BORNHOLM, DENMARK – SEPTEMBER 27: Danish defense shows the gas leaking at Nord Stream 2 seen from the Danish F-16 interceptor on Bornholm, Denmark on September 27, 2022.

Danish Defence/ | Anadolu Agency | Getty Images

The European Union has pledged to deliver a “robust and unified response” to an alleged act of sabotage after mysterious gas leaks hit two underwater gas pipelines in Russia.

“All available information indicates that these leaks are the result of a deliberate act,” EU foreign policy chief Josep Borrell said in a statement.

“We will support any investigation aimed at gaining full clarity on what happened and why, and take further steps to increase our energy security resilience. Any intentional disruption of Europe’s energy infrastructure is absolutely unacceptable and will be met with a robust and unified response,” he added.

Here’s the full story.

– Sam Meredith

Bank of England delays bond sale and embarks on temporary buying program after market turmoil

LONDON – FEBRUARY 03: Bank of England Governor Andrew Bailey leaves after a press conference at the Bank of England on February 3, 2022 in London, England. The bank is expected to hike interest rates for a fifth consecutive day on Thursday but faces a difficult balancing act between supporting growth and curbing inflation.

Dan Kitwood | News from Getty Images | Getty Images

The Bank of England is set to suspend its scheduled start of gilt sales next week and begin temporarily buying long-dated bonds in a bid to calm the market chaos sparked by the new government’s so-called ‘mini-budget’.

UK Gilt yields are on track for their strongest monthly rise since at least 1957 as investors flee UK bond markets following fresh fiscal policy announcements. Measures included large amounts of unfunded tax cuts that have drawn criticism from around the world, including from the IMF.

In a statement on Wednesday, the central bank said it was monitoring the “significant repricing” of UK and global assets in recent days, which has hit long-term UK government debt particularly hard.

Read the whole story here.

-Elliot Smith

The Bank of England’s position is “nearly impossible,” says the chief investment strategist

The British government has made the Bank of England's position almost impossible, the strategist says

Harnett said domestic companies – those in the FTSE 250 – “are going to be the ones who are going to struggle”, which is a concern for the UK

“When markets see a crack, they grab it in a big way and we see that crack widening in the UK,” he told CNBC’s Squawk Box Europe.

– Hannah Ward-Glenton

Stocks on the move: Thyssenkrupp down 8%, Roche up 5%

Shares in German multinational conglomerate Thyssenkrupp fell 8% in early trade after JPMorgan resumed its coverage of the stock with an “underweight” rating.

At the top of the Stoxx 600, Swiss drugmaker Roche rose 5.7% after a positive analogy from an Alzheimer’s drug trial by rivals Eisai and Biogen.

-Elliot Smith

Yields on 20- and 30-year UK Gilts exceed 5%

20-year and 30-year UK gilt yields rose above 5% on Wednesday as the extraordinary sell-off in the UK bond market continued.

Bond yields move inversely with prices. The new government’s so-called “mini-budget” sparked a sell-off in UK bond markets on Friday, with gilt yields now set for their biggest monthly rise since at least 1957, according to a Reuters analysis by Refinitiv and Bank of England data .

-Elliot Smith

IMF delivers scathing verdict on UK tax cuts

Signage outside the International Monetary Fund (IMF) headquarters in Washington, DC, U.S., Tuesday April 19, 2022. The IMF has cut its world growth forecast the most since the early months of the Covid-19 pandemic and is forecasting even faster inflation , after Russia invaded Ukraine and China renewed virus lockdown. Photographer: Al Drago/Bloomberg via Getty Images

Bloomberg | Bloomberg | Getty Images

The yield on 10-year US Treasury bonds breaks the 4% mark for the first time since 2010

CNBC Pro: Credit Suisse says now is the time to buy two green hydrogen stocks — giving one over 200% upside

Credit Suisse says it’s time to jump into the green hydrogen sector, with a suite of catalysts set to propel the clean energy powerhouse.

“Green hydrogen is a growth market – we are increasing our market estimates for 2030 [over] 4x,” the bank said, predicting that green hydrogen production will increase 40x by 2030.

It names two stocks to ride the boom — one with more than 200% upside potential.

CNBC Pro subscribers can read more here.

— Wheat Tan

CNBC Pro: Money Manager reveals what’s next for stocks — and shares how he’s trading the market

CNBC Pro Talks: Money manager Neil Veitch on top picks -- and stocks to avoid -- amid continued volatility

Neil Veitch, investment director at Edinburgh-based SVM Asset Management, expects the macro landscape to remain “rather difficult” for the remainder of the year.

Speaking to CNBC Pro Talks last week, Veitch identified the key drivers that could help the stock market become “more constructive” and shared his view of growth versus value.

CNBC subscribers can read more here.

– Zavier Ong

10-year US yield nears key 4% level

The 10-year government bond yield is approaching just under 4%, a level not seen since 2010.

The 10-year Treasury note is the benchmark yield that sets the price for home mortgage rates and other consumer and corporate lending. It is higher this week as UK gilt yields rise and expectations of an aggressive Federal Reserve Board rise.

The yield was 3.96% in afternoon trade. The 10-year yield reversed an earlier decline and gained about basis points. (One basis point equals 0.01 percentage points)

“It was definitely impressive and I just don’t think anyone is ready to step in and catch the falling knife just yet,” said BMO’s Ben Jeffery. He added that a lack of liquidity has also pushed yields higher, which move inversely with price.

Jeffery said the yield ahead of the 1 p.m. auction of the 5-year notes was also moving higher.

He said that 10-year-olds tested the 4% mark in 2010. “The last time we were sustained above 4% was in 2008. There’s another technical level at 4.10% and then there’s not much notable until 4.25%,” he said.

Patti Dom

European Markets: Here are the opening calls

European stocks are expected to open in negative territory on Wednesday as investors react to the latest US inflation data.

According to data from IG, the UK FTSE index is expected to open 47 points lower at 7,341, the German DAX 86 points lower at 13,106, the French CAC 40 28 points and the Italian FTSE MIB 132 points lower at 22,010.

Global markets retreated after a higher-than-expected U.S. CPI report for August, which showed prices rose 0.1% for the month and 8.3% annually in August, the Bureau of Labor Statistics reported on Tuesday, defying economists’ expectations that inflation would fall 0.1% on a monthly basis.

The core CPI, which excludes volatile food and energy costs, is up 0.6% since July and 6.3% since August 2021.

UK inflation figures for August are due and July euro-zone industrial production to be released.

— Holly Ellyatt

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