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Markets in 3 Minutes: Gilts May Trigger Global Bond Weakness
Geopolitical & Market Optimism - Markets showed slightly higher optimism due to potential peace deal progress, particularly benefiting European equities [3][4] - Global markets outside Europe stagnated, indicating optimism is not universally shared [5] UK Inflation & Bond Market - UK inflation remains significantly above target, raising concerns about undermined UK data [6] - Long-end gilt yields are rising, mirroring a global trend in rising yields, including Chinese yields [7] - Bond vigilante isms are creeping back into the market, potentially accelerating after Jackson Hole [8] Bond Yields & Jackson Hole - Higher bond yields are seen as a potential problem for global stocks in the coming weeks [9] - Expectations are that Jerome Powell will aim to say very little at Jackson Hole, avoiding validation of a September rate cut unless data is very poor [9][10] - A slightly hawkish stance from Powell is anticipated, potentially disappointing the market [10]