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BOE's Carney Gets Crushed by the Markets

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U.K. bonds extend gains after the Bank of England fails to fill its purchase target, oil falls on Saudi record production, and Trump is in trouble again. Here are some of the things people in markets are talking about today.

Gilts rally

U.K. debt is rallying this morning with yields on 3-, 5-, 10- and 30-year bonds falling to record lows. Yesterday, the second day of purchases under the Bank of England's expanded QE program, saw the bank fail to purchase the targeted amount of longer-dated bonds as it could not find enough sellers. The bank this morning said that it would add the purchase shortfall to a later operation. The pound also rallied this morning, and was trading at $1.3055 at 5:44 a.m. ET.

Oil falls

A barrel of West Texas Intermediate for September delivery fell to $42.28 by 5:37 a.m. ET, with a Brent dropping to $44.56, extending yesterday's declines. Data from the American Petroleum Institute on Tuesday showed inventories rose, with the agency also downgrading its price forecast for the rest of the year. Adding to the downward pressure is news that Saudi Arabia has told OPEC that it pumped a record 10.67 million barrels of oil a day in July, according to two people with knowledge of the data. 

The Dollar doesn't believe in a Fed hike

The dollar fully erased the rally sparked by last week's bumper payrolls number, with the Bloomberg Dollar Spot Index trading 0.4 percent below last Friday's open this morning. Market-based expectations of another rate hike this year are at 45 percent. While the short-term movement in the dollar is lower, the longer view remains that the greenback is in an up-trend, with implications there for the price of gold over the medium term. 

Markets slip

Global stocks markets are slipping a little this morning as the August lull continues. Overnight in Asia, the MSCI Asia Pacific Index added 0.2 percent, with Japan's Topix index dropping 0.2 percent in light trading. In Europe, the Stoxx 600 Index was 0.3 percent lower at 6:06 a.m. ET, with volumes traded about a third below the 30-day average. Germany's DAX Index, which entered a bull market yesterday, was down 0.5 percent. S&P 500 futures added 0.1 percent

Trump in trouble (again)

Republican presidential nominee Donald Trump finds himself embroiled in a new controversy this morning after he suggested that "the Second Amendment people" could stop Hillary Clinton from abolishing the right to bear arms. Clinton's campaign condemned Trump's comments. Trump's troubles extend beyond his controversial utterances, as a Bloomberg national poll released this morning show he is 6 points behind the Democratic nominee in a two-way race.

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