BOE, UK, Msci Asia Pacific discussed on Bloomberg Daybreak Europe

Automatic TRANSCRIPT

The Bank of England into the guilt markets this morning. I wonder what you make of it, Tom. This as we're looking ahead, of course, to the debt management office, you've got another bomb sale linker sale that's coming up at 10 a.m. this morning. Will that test the markets again? I thought it was fascinating the language from the Bank of England saying they were stepping in to avoid what they described as fire sale, dynamics in these markets. And it worked briefly, but the last time I checked the gilt markets, that was starting to turn going. Yeah, absolutely. We did see UK ten year and really across the curve a yields thinking, but actually now only down about 5 basis points. So the ten year yield is at four 41, just compare that to Italy, which is at four 68. With a four basis point jump for Italian BTP's German yields nowhere near that level at two 29, U.S. yields trading at three 95 by 7 basis points there. Again, you've got the CPI data out of the U.S. on Thursday, absolutely vital for markets just in the other spheres that we watch European stocks are down 7 tenths of 1% extra Dax down 6 cents. You had a sell off in the tech names over in Asia because of those ratcheting tensions between the U.S. and China, MSCI Asia Pacific index dropping 2%. And then blue McDonald's spot index, again, the safe haven are by two tenths of 1% Tom. Well, let's get back to the top stories and that includes, of course, what has been happening with the Bank of England yields, how full and after the Britain's Central Bank increased its market intervention this morning to include index linked gilts in an effort to stop quote fire dynamics, attempts yesterday by the government and the BOE to reassure markets about the government's fiscal plans, failed to have the desired impact on gilt markets with yields rising sharply. Speaking to us here on Bloomberg radio, Alan Higgins, coots and co's chief investment officer, says it is make or break time for the UK. They haven't done enough. So they had this big bond buying program at the longer end just guilt not index linked. And as we know, first day they did a decent amount and then they did almost nothing and the market is caught up with them and it's a serious problem in the pension fund industry. And it's going to be very interesting today. Today is make or break. Alan Higgins coots and company's chief investment officer, they're giving us his thoughts on the state of play for the Bank of England. The intervention comes as the institute for fiscal studies warn that the Chancellor will need to find savings of at least 60 billion pounds if he's going to reach his target of getting public finances back under control. Okay, we're going to delve into that story on the Bank of England in greater depth throughout the program this morning. JB rush European economists also Joe Mays from our politics team and Marcus ashworth Bloomberg opinion will join us on the Bank of England state of play, but also we had out some data earlier at 7 a.m., the UK unemployment rate fell to three and a half percent in the three months through to the end of August. That was an unexpected drop. It hit the lowest level since 1974, the tight labor market is likely to add more upward pressure to prices and to wages, ManpowerGroup UK director Chris gray says that there is a clear recession risk. While the market is tight, we are starting to see some loosening and by that what I mean is that there's a bit more availability in the market, but it's still a tight market, but I think the big challenge for employers and businesses is that if they haven't got the people to deliver the outputs they need to deliver, then they're just not going to be able to grow, of course, that points to a recession, which everyone is talking about in the coming months. Chris grave, the ManpowerGroup, UK director, his fears were backed up by the UK's inactivity. That is the count of people out of work and not looking for a job that rose by the strongest rate since data started 1971. At the heads of the International Monetary Fund, meanwhile, and the World Bank say the risk of a global recession is now rising, with higher rates feeding through to the real economy. World Bank president David malpass says there's now quote a real danger of a worldwide contraction next year. The risk in the real danger of a world recession next year. The advanced economies are slowing in Europe, the debt levels for the developing countries are getting more and more burdensome. The rise in interest rates puts added weight on it and inflation is still a major problem for everyone, but especially for the poor. Well, bank president David malpas comments were echoed yesterday by JPMorgan CEO Jamie Dimon. He says quote, serious headwinds are likely to push the U.S. and global economies into recession by the middle of next year. U.S. president Joe Biden has condemned what he calls the utter brutality of Russian missile strikes across Ukraine. The attacks mark a dangerous new escalation in the war and include the first strikes on Kyiv in months, but the Ukrainian president Vladimir zelensky says it only strengthens his people's resolve. Ukraine can not be intimidated only united even more. Ukraine can not be stopped only convinced even more that terrorists must be neutralized the Russian army specifically struck these blows precisely during the morning rush hour. This is a typical terrorist tactic. Zelensky spoke after Vladimir Putin threatened additional strikes against Ukraine following Monday's blitz, this all came after the weekend, Putin accused Ukraine of carrying out an attack on a bridge connecting Crimea to

Coming up next