Insights

Weekly Market Commentary

16 October 2024

This week has been tough for bond investors. The general picture is unchanged as the US jobs market remains robust and CPI inflation is falling. Core inflation is a bit more sticky but, again, this was expected. Yet bonds have fallen. In the UK, there is a further complication from the upcoming budget. The chancellor is widely expected to change government borrowing rules and a significant change could free up billions in potential additional borrowing to fund the government’s growth plans. This week brought several warnings about whether bond markets tolerate a big increase in government borrowing. With the yield on 10-year gilts now above 10-year treasuries this could be a sign of nervousness among bond investors.