European stocks mark lowest close since start of the year; UK 30-year yield at highest since 1998

The yield on long-dated U.K. government bonds on Friday reached its highest level since 1998, according to Reuters data, reflecting a global move higher in yields as Middle East turmoil and a message of higher for longer rates hit home.

The 30-year gilt yield was 5.107% at 2:55 p.m. London time, after going as high as 5.158% in the early afternoon.

Figures published Friday morning showed U.K. borrowing was £20 billion ($24.28 billion) lower than expected for the first six months of the financial year.

This was still the sixth highest September borrowing since monthly records began in 1993, the Office for National Statistics said. U.K. net debt is now 97.8% of GDP, 2.1 percentage points higher than in September 2022.

“Higher gilt yields … make the U.K.’s long-term fiscal outlook even more challenging,” Paul Dales, chief U.K. economist at Capital Economics, said in a note.

Yields are also in focus in the U.S., where the benchmark 10-year Treasury crossed 5% for the first time in 16 years on Thursday.

— Jenni Reid

U.S. stocks were down as Friday trading kicked off.

The Dow was 0.2% lower shortly after 9:30 a.m. ET, while the S&P 500 and Nasdaq Composite lost 0.1% and 0.2%, respectively.

All three indexes are also on pace to end the week with losses.

— Alex Harring

Gold climbed to a three-month peak on Friday, putting it on pace for a second straight weekly rise as fears of heightening conflict in the Middle East pushed investors towards safe-haven assets.

Gold is up 2.5% so far this week after gaining 5.22% last week. Spot gold was up 0.3% at $1,979.3 per ounce, after hitting its highest since July 20. U.S. gold futures added 0.5% to $1,991.4.

The VanEck Gold Miners ETF (GDX) is up 1.9% so far this week, on track for its first positive week in three. B2Gold, Barrick Gold and New Gold are all up about 5% or greater this week.

— Pia Singh, Gina Francolla

Bitcoin is on track to post its biggest weekly gain in about four months.

The digital currency is up slightly more than 11% week to date. If that holds through Friday, it would mark the best week since the one ending June 23, when bitcoin climbed 17.1%.

— Alex Harring, Gina Francolla

German producer prices posted their biggest year-on-year decline for September, encouraging views that inflation is easing in Europe’s largest economy. The federal statistics office’s producer price records date back to 1949.

The producer prices of industrial products were down 14.7% in September from the previous year, a steeper decline than the 12.6% drop in August.

The decline in prices is mainly attributable to a base effect caused by high price levels in 2022 as a result of the war in Ukraine.

— Hannah Ward-Glenton

European equity markets opened at a seven-month low Friday, Reuters data shows, as investors digest comments out of the U.S. and global sentiment stutters.

The pan-European Stoxx 600 index opened 0.7% down, with most sectors in negative territory. Mining stocks saw the biggest drop with a 1.5% decline, followed by household goods, which fell 1.3%. Oil and gas bucked the trend with a 0.2% uptick.

— Hannah Ward-Glenton

The yield on the benchmark U.S. 10-year Treasury crossed 5% for the first time in 16 years.

The 10-year Treasury yield hit 5.001% at 5:02 p.m. ET, the first time it has traded above that key level since July 20, 2007 when it yielded as high as 5.029%.

— Gina Francolla, Christine Wang

European stock markets are set to open lower Friday, according to IG data. Britain’s FTSE looks set to fall 28 points to 7,477 and Germany’s DAX 79 points to 14,958. France’s CAC is set to drop 45 points to 6,873, and Italy’s MIB 226 points down to 27,471.

— Hannah Ward-Glenton