FTSE 100 falls on lower commodity prices

The yield of British bonds dropped, as investors look for haven assets as recession fears progress. It fell 16bp on the 10-year gilts. Yesterday, data showed inflation hit 9.1% YoY in May, after a 9.0% reading in April, fueling fears of a slowdown of the UK economy.

Jerome Powell tried to reassure investors in a speech yesterday, arguing that the US economy might be strong enough to resist more interest rate rises. The FTSE 100 still declined 0.9%.

This morning, the FTSE is down 1%, weighed down by the ongoing fall in commodity prices due to recession worries and rising Covid-19 cases in China.

A second day of rail strikes is under way after talks between the RMT union and railway employers failed to produce any compromise.

Investors will be assessing the  UK Purchasing Managers' Index (PMI) data released this morning, to get more clues about the health the services and manufacturing industries.

Among stocks, Online gambling firm 888 tumbled 4.3% after warning it expects to report lower half-year revenues.

 

Things to read today:

US banks take a hit from discounted corporate bond sales (Financial Times)

Germany Takes Step Closer to Gas Rationing With Heightened Alert (Bloomberg)