But rates are not the only clouds on the horizon. It also looks like the U.S. is heading for a government shutdown over debt ceilings talks, which is adding to the dampened mood, along with hawkish speeches yesterday from central banks and the Evergrande case.

However, this morning, London equity markets are bouncing back 0.7%, ahead of more speeches this afternoon from the ECB's Christine Lagarde, the Bank of England's Andrew Bailey and Fed chief Jerome Powell.

Financial and healthcare stocks are the best performers. AstraZeneca jumped 2.5% after it said its Alexion division would buy the remaining equity in drugmaker Caelum Biosciences for a rumored $500 million.

Retailer Next is also doing well, jumping 3.6% after raising its full-year profit guidance.

At the same time, SSP Group fell 1.4% due to lower-than-expected sales.

 

Things to read:

Mark Gilbert: Inflation and Supply Shortages are Waking Up the Bond Bears (Bloomberg)

Global Bond market set for worst month since early 2021 (Financial Times)

Evergrande to Raise $1.5 Billion by Selling Bank Stake to State-Owned Firm (WSJ)

Most Americans today believe that the stock market is rigged, and they are right (Bloomberg)