Market bets on rate hikes would hit the economy, BoE deputy governor says
The Bank of England’s Deputy Governor Ben Broadbent told investors that betting on big increases in interest rates would deliver a “pretty material” hit to the economy.
Broadbent said it’s unclear how the British government’s new energy price cap plan will affect inflationary pressure in the medium term, after new Finance Minister Jeremy Hunt scaled back the original plans.
— Hannah Ward-Glenton
German producer prices above market expectations
Germany’s Federal Statistical Office said Thursday morning that producer prices in the country rose by an annual 45.8% in September.
Economists had been expecting a figure of 44.7%, according to Reuters. This adds to concerns that wider inflation figures will keep rising over the coming months.
—Matt Clinch
Nordic telecom companies dip: Ericsson down 12%, Nokia down 5%
Shares of Ericsson dropped 12% following third quarter earnings, while Nokia is down 5% in early trade.
Both companies’ operating margins suffered from rising costs and contract delays.
— Hannah Ward-Glenton
European markets: Here are the opening calls
European markets are heading for a negative open on Thursday as investors assessed continuing economic uncertainty.
The U.K.’s FTSE index is expected to open 37 points lower at 6,899, the German DAX down 106 points at 12,635 and the French CAC down 52 points at 5,988, according to data from IG.
Regional markets closed slightly lower Wednesday afternoon as traders digested new inflation data for the U.K. and assessed rate hike expectations and recession fears.
The U.K. reported a rise in the consumer price index to 10.1% Wednesday, matching the 40-year high posted by the Office for National Statistics in July. Food, energy and transport prices drove the increase.
On the data front in Europe, French business climate data for October is due. Earnings are due from Hermes, Kering, L’Oreal, Pernod Ricard, Vivendi, Akzonobel, ABB, Nokia and Volvo Group.
— Holly Ellyatt
CNBC Pro: Chip stocks have been down all year — but one looks ‘really inviting’, says fund manager
Semiconductor stocks have been beaten down this year, but investors with a longer-term view on the importance of chips to secular trends such as 5G, electrification and artificial intelligence could look to buy the dip.
Hedge fund manager David Neuhauser shares one chip stock he likes.
Pro subscribers can read more here.
— Zavier Ong
Sterling extends losses as UK PM Liz Truss addresses Parliament
UK markets now come with a ‘competence risk premium,’ economist says
The last couple of weeks have put a “competence risk premium” into the financial markets, Paul Donovan, chief economist at UBS Wealth Management, said on CNBC’s “Squawk Box Europe.”
“Financial markets have judged the U.K. government to not be as competent as it could’ve been,” Donovan said.
CNBC Pro: Taking cover in bonds ahead of a recession? BlackRock says that’s an ‘obsolete’ playbook
Recession fears are roiling markets, but the typical playbook of taking cover in sovereign bonds is “obsolete,” says BlackRock.
“In this environment, bond vigilantes are back and heralding term premium’s return,” BlackRock said, adding that it’s underweight on government bonds.
The asset manager says that investors can still buy other types of bonds, however.
CNBC Pro subscribers can read more here.
— Weizhen Tan
