Bonds: Gilts drop sharply after Autumn Statement
These were the movements in some of the most widely-followed 10-year sovereign bond yields:
US: 2.36% (+5bp)
UK: 1.45% (+9bp)
Germany: 0.26% (+4bp)
France: 0.78% (+7bp)
Italy: 2.12% (+9bp)
Spain: 1.60% (+7bp)
Portugal: 3.68% (+5bp)
Greece: 6.92% (+1bp)
Japan: Bank holiday
Gilts were among the worst performers on Wednesday, alongside debt issued by Rome, after the Chancellor announced an additional 122bn pounds-worth of borrowing amid strong economic data on both sides of the Atlantic.
On a related note, in remarks made at a JP Morgan Cazenove event, Monetary Policy Committee member Kristin Forbes said the negative impact from uncertainty had been less than was typically the case.
However, she cautioned that the effects on supply and wages might be lagged, Market News International reported.
Losses for Gilts also came alongside a report from Reuters that the European Central Bank was considering lending the German bonds it owns in order to avoid a market freeze.
Said report triggered an outsized move in two-year German debt, sending yields higher by as many as six basis points to -0.67% at one point in the session.
Stateside, the latest figures from the Department of Commerce showed that total durable goods orders grew 4.8% month-on-month in October to reach $239.4bn, dwarfing the 1.1% rise penciled in by economists.
Most of the rise was attributable to a 94.1% jump in the volatile non-defence aircraft and parts category, but excluding those from the transportation sector orders were also ahead of Wall Street´s forecasts.
In parallel, the latest readings on US consumer confidence and IHS Markit´s manufacturing sector PMI also came in stronger than anticipated.
It was a similar story in the euro area, where IHS Markit’s 'flash' Eurozone manufacturing and services purchasing managers’ indices for November both beat estimates - and by a wide margin.
The 'flash' manufacturing PMI came in at 53.7 versus expectations of 53.3, while the services PMI printed at 54.1, beating estimates of 52.9. This was up from 53.5 in October and 52.8, respectively.
Chris Williamson, chief business economist at IHS Markit, said: “The preliminary PMI results for November indicate the sharpest monthly increase in business activity so far this year, with plenty of signs that growth will continue to accelerate.