Key Facts
• August 29: European bond market saw long-term bonds sold, steepening the yield curve.
• German 30-year bond yield rose 3 basis points to 3.33%, nearing its peak of 3.36%.
• French-German 10-year bond yield spread widened by 1 basis point but stayed below 80 basis points.
• European stocks fell 0.6%, with technology stocks leading the decline.
• UK bank stocks, including NatWest and HSBC, dropped amid renewed calls for excess profit taxation.
• German inflation accelerated more than expected; US PCE index rose 0.3% month-on-month.
• Defense stocks like Rheinmetall gained as German Chancellor ruled out a Russia-Ukraine summit.
Summary
On August 29, European markets faced declines as inflation concerns and fiscal risks dominated. Long-term bonds were sold, steepening the yield curve, with German 30-year bond yields nearing recent peaks. The French-German bond yield spread widened slightly amid political uncertainties in France. European stocks dropped 0.6%, led by technology shares, while UK bank stocks fell due to renewed discussions on taxing excess profits. Economic data highlighted persistent inflationary pressures, with German inflation accelerating and the US PCE index rising. However, defense stocks like Rheinmetall gained after the German Chancellor dismissed the likelihood of a Russia-Ukraine summit.
