Treasuries Stabilise, UK Lobbies US On Diesel, More
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What is the main topic discussed in this episode?
AI is entering its most consequential phase where scale, safety, and sovereignty will determine who leads and who lags. Join Bloomberg Tech in London on November 2nd and 3rd as global leaders across business, finance and policy examine the defining trade-offs shaping the future of AI. Thank you to our presenting sponsor Salesforce and supporting sponsors IDA Island and Schneider Electric. Learn more at BloombergLive.com slash. Slash Tech London.
News when you want it with Bloomberg News Now. I'm Nathan Hager.
Why are global bond yields rising, and what could stop the sell-off?
Surging oil and mounting bets on further U.S. rate hikes are driving a global bond sell-off. The moves follow U.S. President Donald Trump's rejection of Iran's latest proposal to reopen the Strait of Hormuz, threatening to prolong the war's energy shock.
German tenure yield Closed Monday at a 17 year high, their Italian equivalents reached the highest in nearly three years, and yields on tenure UK GILTS hit a nineteen year high.
We've seen rates rise, obviously, over 100 basis points. If you look at the 10-year so far this year, much of that move was a slow build, really based on the market recognizing the stronger growth that has happened so far this year. But recently, obviously, the move has been a lot bigger. Uh, in our view, this is really the market trying to figure out the Fed is serious about inflation. We've seen that. What exactly does a hiking cycle need to look like to cool inflation at the pace? pace that they would like to see. And that's a little bit of an open question in markets. And every time we get a a strong data growth point, a growth data point, something that's worrisome about inflation, we're gonna see this market reaction, we think, in the very near term.
That was Rebecca Vender of Vanguard. Bloomberg Opinions John Authors has dubbed the turmoil a bond pocalypse. He says a negative surprise in upcoming U.S. data may be the only thing capable of halting the bond sell-off. Subscribers can read his column, What's Going to Break in the Bond Pocalypse right now?
How is the UK government responding to rising borrowing costs and fiscal pressure?
UK Chancellor John Healy is seeking to reassure bond investors that labor will keep the public finances under control. Surging Borrowing costs have wiped out roughly half the twenty three point six billion pound fiscal buffer that Healy inherited from Rachel Reeves. He says he and Prime Minister Andy Burnham are committed to meeting the government's fiscal rules.
On day one. As Chancellor. I said my first duty is fiscal discipline, and I'll tell you why. It underwrites every promise this government makes. On growth. on jobs, on national security and on public services. We can't succeed without it. That's why the Prime Minister and I are united. In meeting the fiscal rules. Balancing the books. With a buffer against uncertainty. controlling borrowing to bring down inflation, А релі редусing лонтер прессурнас.
How could rising bond yields affect ECB policy, inflation, and eurozone growth?
Прім Миністр Берном адрес Лейборс конференц лета тоді, сitting out plans on social care alongside policies on energy, water, and housing. European Central Bank President Christine Lagarde says rising bond yields will slow economic growth and help contain inflation. Speaking to lawmakers in Brussels, Lagarde said higher borrowing costs should limit how much elevated energy prices feed through to price pressures.
Growth has been resilient, no question about it. As you know, we have updated our projections as well, both for twenty six and twenty seven. Since our last meeting, uh we have seen new developments, particularly at the longer end of the curve, and long term interest rates have risen notably. That will have an impact on growth. It will s probably slow growth and reduce pass through by more than projected in our September exercise.
Madame Lagarde added the ECB should adopt a measured response as appropriate to keep inflation in check. Euro area inflation is expected to have jumped to 3.7% in September, well above the ECB's 2% target.
Why is the UK lobbying the US over a potential diesel export ban?
Traders are pricing almost four more quarter-point ECB rate hikes over the next 12 months.
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Chapters
8 chapters
1
What is the main topic discussed in this episode?
0:00–0:35
2
Why are global bond yields rising, and what could stop the sell-off?
0:35–2:13
3
How is the UK government responding to rising borrowing costs and fiscal pressure?
2:13–3:11
4
How could rising bond yields affect ECB policy, inflation, and eurozone growth?
3:11–4:12
5
Why is the UK lobbying the US over a potential diesel export ban?
4:12–4:59
6
Why did OpenAI hold back its latest AI model over safety concerns?
4:59–6:14
7
How much revenue must AI data centers generate to justify their investment?
6:14–7:03
8
How could US troop cuts and defense demands affect UK and European security?
7:03–11:02
Speakers
8 identifiedMore from Bloomberg News Now
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