Markets on Edge as Fuel Prices Surge
Financial markets are in a precarious position as we head into the final weeks of Q3. Oil prices have been falling, and European and US stocks are poised to open higher on Monday.
The bond market remains volatile, with sovereign bonds experiencing another scare late last week. The IMF has warned about record levels of global debt and urged governments to narrow budget deficits and rein in debt levels.
Fuel prices have risen sharply, with diesel prices hitting a record high in the US and unleaded petrol prices reaching a four-year high in the UK. These price increases feed directly into the CPI basket and are changing the calculations for bond investors.
UK Gilt markets suffered another scare on Friday, along with French sovereign debt. The focus remains on the bond market as we head into the final weeks of Q3, and sovereign debt remains vulnerable to further sell-offs.