Bonds, U.S. stocks fall as inflation makes comeback
BNN Bloomberg
European bonds and stocks fell after the latest round of price data suggested inflation may not yet be fully on the retreat in the euro region.
Germany's 10-year yield jumped as much as six basis points to 2.57 per cent after reports showed inflation accelerated in four of six German states in August, ahead of figures for the overall German economy due later Wednesday. A separate report showed Spanish inflation also quickened.
The Stoxx Europe 600 dropped, with utilities underperforming as Orsted A/S plunged more than 20 per cent after the Danish power generator forecast potential impairments of up to US$2.3 billion relating to its U.S. portfolio. Among other individual movers, Prudential Plc climbed more than four per cent after posting a rise in new business profit.
The German and Spanish inflation data muddied the waters for European policy makers as they approach the September rates decision. Market pricing implies roughly even odds of a quarter-point increase by the European Central Bank to four per cent next month. Further clouding the outlook was data showing that euro-area economic confidence slowed more than anticipated this month.
