Volatility picked up during September. Markets are having a crisis of confidence as suddenly there seems much to worry about: queues for petrol, empty shelves, the HGV driver shortage, higher gas prices and rising inflation. The energy crunch is fanning fears that the current inflationary spike will prove long-lasting. With supply bottlenecks around the globe, there is chat of a return to the stagflation conditions of the 1970s.
With mounting concern that demand will suffer from slower growth, metals prices most reflected those fears. Nickel, for example, fell 7.8 per cent, copper 6.5 per cent and platinum 3.4 per cent. Energy prices, on the other hand, are flying. Brent crude was up 9.3 per cent to $79 a barrel – its highest since October 2018. Gas prices have increased around the world but no more so than in the UK. Since 1 October, spot gas has traded as high as 400p per therm, having averaged 54p between January and May.
The impending tapering of the Federal Reserve's bond-buying programme and fears that inflation may be more persistent reversed the steady decline of the US Treasury 10-year yield. It rose from 1.3 per cent to 1.5 per cent over the month – although still below the 2021 peak of 1.75 per cent reached in March.