UK Assets Drop After Treasuries End Four-Day Selloff – Europe Market Wrap

US Treasuries were headed for their first day of gains this week on robust demand for foreign bonds, capping a selloff fuelled by market concerns over government debt and rising inflation. The widespread fall of UK assets continues.

Global stock prices continued under pressure. US equities futures fell, and Europe’s Stoxx 600 was barely changed, following a dismal session in Asia.

In currency markets, the Dollar edged higher, while the Yen rose to 158 against the Dollar. Japanese workers’ base incomes increased the most in 32 years, providing potential support for the central bank to hike interest rates this month.

However, European bonds defied the broader trend, as gilts remained under pressure and the selloff in UK assets accelerated. Concerns over Britain’s poisonous mix of sticky inflation and slow economy are driving the changes, with more traders fleeing.

The yield on 10-year gilts rose 5 bps to 4.84% after reaching its highest level since 2008 on Wednesday. The Pound sank 0.6%, reaching a level last seen in 2023.

[05:41 ET] UK Chief Secretary to the Treasury Jones: UK financial markets continue to function in an orderly way. [Pound Weakened]