Huw Pill, the BOE’s chief economist, sees a significant increase
“It’s hard not to conclude that this will require a significant monetary policy response,” Huw Pill said at the CEPR Barclays Monetary Policy Forum on Tuesday, according to Reuters.
His comments come after big moves in UK bond markets on Monday amid the UK government’s tax cut package.
“I want to be clear at this point that I think the combination of financial announcements that we’ve seen will act as stimulus,” Pill said.
– Matt Clinch
Wall Street is climbing
U.S. stocks rose on Tuesday, with the Dow Jones Industrial Average and the S&P 500 rebounding from their lowest closing levels in nearly two years.
Read the full report here.
The Fed’s Evans says he’s a little nervous about going too far with rate hikes
Chicago Federal Reserve President Charles Evans says he’s worried the U.S. central bank is raising interest rates too quickly to address the problem. runaway inflation.
Speaking to CNBC, “Squawk Box EuropeOn Tuesday, Evans said he remained “cautiously optimistic” that the U.S. economy could avoid a recession — unless there are additional external shocks.
His comments come shortly after senior Fed officials they said that they will continue to fight inflation as a priorityIt is nearing its highest level since the early 1980s.
– Sam Meredith
Analyst says UK is in pandemic-style easing without pandemic-style monetary policy
According to Imogen Bachra, head of UK rates strategy at NatWest, market players are underestimating how the increased supply of UK bonds will affect them.
“The fact that the Bank of England won’t buy bonds even if they’re not actively selling back into the market is a big turning point in all this supply,” he said.
“This is pandemic-style easing, but without the pandemic-style monetary policy where the Bank of England buys all the bonds issued by the Treasury.”
He also said he believes earnings will continue to travel higher. On Monday, the yield on 10-year gold rose to levels not seen since 2008.
Stocks on the move: Wise up 7%, Vitrolife down 20%
London-based fintech stocks Wise It rose 7% to lead the Stoxx 600 in afternoon trade after Morgan Stanley raised its price target for the stock to 700p a share from 570p.
Swedish IVF company at the bottom of the European blue chip index Vitrolife Bank of America has lost more than 20% since it began covering the stock with an “underperform” rating.
– Elliot Smith
The Bank of England is right to hold off on raising interest rates as the pound falls, says an investment director
According to Julian Howard, Chief Investment Officer of Multi Asset Solutions at GAM Investments, the UK central bank should not rush to raise interest rates. collapsing pound.
“I don’t think the Bank of England is going to strengthen the pound,” Howard told CNBC’s “Squawk Box Europe” on Tuesday.
“I prefer to frame this as a global phenomenon and I think the Bank of England should stop before it raises rates further,” he said.
He also said that talk of the UK becoming an emerging market was “a bit premature”.
“Some have even said we’ve become a Mediterranean country, but without the weather – I think that’s too harsh,” Howard said.
“I think in the medium-term perspective [deregulation and tax cuts] could have been very useful, but the market decided to ignore it,” he told CNBC.
– Hannah Ward-Glenton
Stocks on the move: Nexi up 6%, Vitrolife down 9%
stocks connection The Italian payments group rose 6% in early trade to lead the Stoxx 600 after it published a new business plan that forecast it would generate 2.8 billion euros ($2.7 billion) of excess cash for M&A and share buybacks between 2023 and 2025. won.
At the bottom of the European blue chip index, the Swedish IVF company Vitrolife fell by more than 9%.
CNBC Pro: Where Dan Niles puts his money
“We made money today. We’re up in August. We’re ready for the year,” fund manager Dan Niles told CNBC.
As major stocks remain in the red this year, an investment veteran shares his take on this volatile market.
Pro subscribers can read more.
– Xavier Ong
Better to act ‘aggressively’ against high inflation, says Fed Master
Inflation in the US is “unacceptably high” and uncertainties are “not weighing” on monetary policy decisions, Cleveland Fed President Loretta Mester said. prepared comments at the Massachusetts Institute of Technology.
“When there is uncertainty, it may be better for policymakers to act more aggressively,” he said. “Aggressive and preventive measures can prevent the worst outcomes from actually happening.”
He said he would be “very cautious” in evaluating inflation data.
“I should see a couple of months of decline in readings month over month,” he said. “Wishful thinking cannot replace convincing evidence.”
– Jihye Lee
The World Bank lowered its growth forecasts for the East Asia and Pacific region
The World Bank cut its full-year growth forecast for East Asia and the Pacific for 2022 to 3.2% from the 5% it predicted in April. report was released on Tuesday.
“The slowdown in growth is mainly due to China,” the organization said, also lowering its 2022 forecast for the country to 2.8% from 5%. The World Bank expects China to grow by 4.5% in 2023.
Average inflation is expected to exceed 5% this year, an upward revision from the 3% previously forecast in April, the report said.
– Jihye Lee
CNBC Pro: Analysts once again like Nvidia, Citi gives it almost 100% preference
Analysts are again bullish Nvidiaafter the semiconductor giant fell out of favor amid geopolitical tensions and a slowdown in the chip sector.
Strong demand for PC gaming, as well as cloud adoption in data centers, will be tailwinds for Nvidia, Citi and JPMorgan said last week.
So how much did they each favor Nvidia stock? CNBC Pro subscribers can read more here.
– Weizhen Tan
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.
UK’s FTSE is expected to open 47 points lower at 7,341, Germany’s DAX down 86 points at 13,106, France’s CAC 40 down 28 points and Italy’s FTSE MIB down 132 points at 22,010, according to IG data.
Global markets retreated after a better-than-expected reading US consumer price index On Tuesday, the Bureau of Labor Statistics reported that prices rose 0.1% month-on-month and 8.3% year-on-year in August, defying economist expectations that headline inflation would ease 0.1% month-on-month.
Core CPI, which excludes volatile food and energy costs, rose 0.6% from July and 6.3% from August 2021.
August inflation figures are expected in the UK and eurozone industrial production for July will be published.
– Holly Elliott
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