![]() ![]() "The risk premium on UK gilts is already rising, coincident with unusually large foreign outflows. Gopal suggested that added uncertainty on trade policy would further muddy the macroeconomic picture and dent investor confidence. and the European Union, a move likely to prompt retaliation from the bloc. Truss has also suggested scrapping the Northern Ireland protocol, a key part of the post-Brexit withdrawal agreement between the U.K. A large, unfunded and untargeted fiscal expansion accompanied by potential changes to the BoE's mandate could lead to an even bigger rise in inflation expectations and - at the extreme - the emergence of fiscal dominance." is suffering from the highest inflation rate in the G10 and a weakening growth outlook. However, the opposite is happening," Gopal said in a note Monday. "With the current account deficit already at record levels, sterling requires large capital inflows supported by improving investor confidence and falling inflation expectations. Sterling was fractionally lower against the dollar on Monday afternoon, trading just below $1.15, but Deutsche Bank FX Strategist Shreyas Gopal warned that the risks of a "sterling crisis" should not be underestimated. is to avoid extreme macroeconomic events, particularly a balance of payments crisis. ![]() markets are closed Monday for the Labor Day holiday.įollowing the news that Liz Truss will become Britain's new prime minister, Deutsche Bank says policy announcements in the coming weeks will be crucial if the U.K. Overnight in Asia-Pacific markets, shares were mixed as investors digested the results of a private survey on Chinese services activity which showed the sector grew in August. The reading helped cool market fears that a much more buoyant labor market would give the Federal Reserve license to hike interest rates much more aggressively as it tries to rein in inflation. The figure was just below the Dow Jones consensus estimate of 318,000, while the unemployment rate rose to 3.7%, slightly above expectations of 3.5%. jobs report which showed the American economy added 315,000 jobs in August. The euro fell sharply while European gas prices soared.Įuropean stocks had advanced on Friday to round out a bruising week, as investors reacted to a key U.S. The sharp downward moves for risk assets came after Russia's state-owned energy giant Gazprom announced that gas flows to Europe via the Nord Stream 1 pipeline would be halted indefinitely, citing additional repair requirements. Oil and gas stocks bucked the downward trend to add 2% as prices spiked once more. ![]() Autos plunged 4.8% to lead losses as most sectors and major bourses slid deep into negative territory. The pan-European Stoxx 600 provisionally ended down 0.6%, having recouped some of its earlier losses. ![]()
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