FTSE 100 LIVE: Stocks fall and pound tumbles as UK 30-year bond yields hit 27-year high

The FTSE 100 (^FTSE) and European stocks headed lower on Tuesday as the UK’s long-term cost of borrowing hit its highest level since 1998.

The 30-year gilt yield, or interest rate, has risen to 5.680% in early trading, over the previous 27-year high set on 9 April. It comes a a blow to chancellor Rachel Reeves, who will be drawing up this autumn’s budget.

Jim Reid of Deutsche Bank said: "Even in orderly markets, we’re seeing a slow-moving vicious circle: rising debt concerns push yields higher, worsening debt dynamics, which in turn push yields higher again."

Germany’s 30-year yield also climbed to a 14-year high, tracking a rise in US Treasury yields.

Meanwhile, investors have been piling into gold as a safe-haven asset, which reached a new all-time high over the $3,500 mark to hit $3,508.50 an ounce.

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The rally comes as the markets anticipate interest rate cuts in the US later this year, which has weakened the dollar.

London’s benchmark index (^FTSE) was 0.5% lower in early trade. Germany's DAX (^GDAXI) dipped 0.9% and the CAC (^FCHI) in Paris headed 0.1% into the red. The pan-European STOXX 600 (^STOXX) was down 0.7%. Wall Street is set for a negative start as S&P 500 futures (ES=F), Dow futures (YM=F) and Nasdaq futures (NQ=F) were all in the red. The pound nosedived 1.1% against the US dollar (GBPUSD=X) at 1.3396, on track for its worst day in almost three months.

FTSE Index - Delayed Quote•USD

(^FTSE)

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9,159.86

-36.48

(-0.40%)

As of 9:17:53 AM GMT+1. Market Open. Advanced Chart

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LaToya Harding 23 mins ago

LaToya Harding

Asia and US stocks

Stocks in Asia were mixed overnight with the Nikkei (^N225) rising 0.3% on the day in Japan, while the Hang Seng (^HSI) fell 0.5% in Hong Kong.

Japanese yields have partly bucked the international trend this morning with the strongest 10-year auction since October 2023 helping yields dip -1.4bps.

However, 30-year yields have followed their international peers and are up 1.7bps in Asia trading, hovering around their highest ever yield since they were first issued in 1999. This is ahead of a 30-year auction on Thursday.

The Shanghai Composite (000001.SS) was 0.5% down by the end of the session and in South Korea, the Kospi (^KS11) added 0.9% on the day, recovering from losses in their previous sessions.

Data released this morning indicated that South Korea’s headline inflation decreased for the second month in a row, reaching a nine-month low of 1.7% year-on-year in August (compared to an expected 1.9% and 2.1% in July).

This decline has been primarily attributed to a 50% reduction in bills from SK Telecom, the country’s largest mobile service provider, thus helping to keep inflation below the central bank’s 2% target and opening the door for additional rate cuts to bolster the economy.

Across the pond on Wall Street, markets were closed ahead of the final stretch of the year. The US will return today from yesterday’s Labor Day holiday. 49 mins ago

LaToya Harding

Coming up

Good morning, and welcome back to our markets live blog. As usual we will be taking a deep dive into what's moving markets and happening across the global economy.

Looking ahead, today’s US data includes the ISM manufacturing report for August, while the Euro Area will release its flash CPI for the same month. Central bank speakers include the ECB’s Müller.

Here's a snapshot of what's on the agenda:

7am: Trading updates: Oxford Nanopore Technologies 10am: Eurozone flash inflation reading for August 3pm: US manufacturing PMI report

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