French 10-Year Yield Tops 5% as UK Inflation Rises and Big Tech Faces Legal Costs

French 10-year borrowing costs crossed 5% and weighed on European stocks, while UK inflation rose to 3.5% ahead of next week's Budget. Meta faces a $25bn privacy penalty and Tesla's earnings came alongside SpaceX merger talk.

Maz Vantage ·

French borrowing costs in focus

French government bond yields crossed the 5% mark on Thursday, and European equities came under pressure, according to Investing.com. The Guardian's live coverage reports that the French risk premium over German bonds is the widest since 2011 and that yields reached a fresh 24-year high (The Guardian). On French radio and television, the 10-year yield above 5% was the subject of a debate on whether it is cause for alarm (BFM Business).

Oil and UK inflation

The Guardian's live blog notes oil trading above $111 a barrel (The Guardian). Separately, MarketWatch reports that oil flows out of the Persian Gulf in October have nearly returned to levels seen before the start of the Iran war, though traders remain wary about how fragile the recovery is (MarketWatch).

In the UK, inflation accelerated to 3.5% in the year to September from 3.1%, and government borrowing is also at its highest in a year, ahead of next week's Budget (BBC). Barclays reported third-quarter profits of £2.3bn, taking its year-to-date profits to £8.4bn, up 15%. The Guardian's live blog also reports that the TUC is calling for higher bank taxes, and that one analyst now sees a UK bank tax as the base case, with the Budget due on 28 October (The Guardian).

Big Tech: legal costs, earnings and merger talk

A jury found that Meta misled consumers in a data-privacy case brought in New Mexico, and the company was ordered to pay $25bn (The Guardian). The BBC describes this as the largest fine to date against Facebook's owner, larger than an $18bn deal with California (BBC). Meanwhile, MarketWatch says Meta's stock rose after a strong quarter in its core advertising business, with investors looking at new businesses around its Muse personal assistant (MarketWatch).

Tesla reported third-quarter results that beat projections. Elon Musk said on the earnings call that he had said everything that should be said about a potential merger with SpaceX, which would require the approval of 50% of all Tesla shareholders (The Guardian). The BBC outlines Musk's view that there is "a lot to be gained" from combining the firms (BBC).

Other items

  • French savers continue to move away from the Livret A regulated savings account: outstanding balances fell by €1.5 billion in September, with its rate still below inflation, according to Le Figaro.
  • eBay plans to cut 1,000 jobs, nearly 9% of its workforce (Le Monde).
  • Websites were taken down worldwide after critical vulnerabilities in the PHP programming language triggered a global cyber-security response (BBC). The Guardian estimates around 70% of websites use the language (The Guardian).

Sources