Market Prognosis

A concise summary of the major macro events of the past 24 hours, and selected UK company-specific news.

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October 11, 2022

Gilt market concerns remain

Macro & Overnight

The main macro focus remains on the BoE and the long end of the gilt market. Concern increases that the measures announced underestimate what is required to control yields. Bond market vigilantes are back, and the focus is on what happens this Friday when the original temporary measures expire. Gilt yields continue to rise, and the £ is weakening. The fear remains we revisit the panic of two weeks ago. The BoE continues to tinker with its proposals, adding Index Linkers to its shopping list of assets. This all feels a bit like deck chair re-arranging. 

 

Surprisingly, UK unemployment fell marginally in August. Pay grew 6% annually, below the rate of inflation.  

 

US markets were easier again overnight, and the US$ remains strong. More noises are being made (by members of the ECB and FOMC) about the risks inherent in the US$ wrecking ball. There is an increasing prospect for some Plaza Accord attempt at coordinated action after the US mid-terms. Watch for repeated official denials as confirmatory indicators. 

 

We get US CPI data on Thursday.

 

News from China is not indicative of any significant bounce back from lockdown levels of economic activity. Rates of COVID infections have rebounded following the Golden Week holiday. 

 

UK Company News

Environmental consultants RPS fell as WSP ruled out a higher offer. 

 

Pub operator Marston shares firmed as they signalled a return to pre-COVID revenue levels and well-protected energy and borrowing costs. 

 

Updates from recruiter Robert Walters, pollster YouGov and alternative asset manager Foresight were all broadly in line. Foresight continues to perform well versus its 2021 IPO cohort of the walking dead.    

 

Israeli-based CFD and derivatives provider Plus 500 reported strong Q3 results and raised guidance materially for 2022. Not everyone suffers equally in tougher times.

PROGnosticator

 

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