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The UK political scene is changing. At a simple level this is shown in opinion polls which indicate a large lead for the Labour Party. It could also be seen in the confidence of electoral success evident at the conferences of the two leading parties.

The distressing events in Israel over the weekend will unsettle markets, with implications for the oil price, US treasury yields and currencies.

As we head into the final quarter of 2023, macro headlines have begun to dominate the market narrative again. Oil prices have risen more than 30% since June and bond yields have risen. This is reigniting the concerns which dominated 2022, of higher energy prices and interest rates impacting economic activity and creating higher inflation.

Bond markets stole the headlines last week. A year on from the Liability-Driven Investment crisis, 30-year UK yields are back to where they were in early October 2022, nudging 5%.

Last week saw a flurry of announcements with relevance to fixed income markets. On Wednesday, UK inflation data surprised on the downside – breaking a disappointing recent sequence.

Historians generally disparage ‘what if’ narratives – but it makes fun reading and, more importantly, challenges accepted wisdom.

Several of my journal updates in recent months have referenced the slow recovery of the UK economy, pointing out that real output was hovering around the 2019 level. This has now proved to be inaccurate.

One of the great skills of the best forecasters is to explain the past and make market moves sound perfectly logical and predictable. I say this tongue in cheek because I have been mulling the causes of the recent rise in US treasury yields. Last week, I read a flurry of notes explaining why global bond yields have gone up.