European markets close slightly higher; Bank of England intervenes in bond market

The pan-European Stoxx 600 provisionally ended 0.3% higher, recovering from losses of 2% in morning trade and a choppy afternoon.

The U.K.'s FTSE 100 was up 0.3% after the Bank of England announced the temporary purchase of long-dated bonds and the suspension of gilt selling next week.

The U.K. bond market has seen a historic sell-off and the pound has plunged to a historic low against the U.S. dollar as traders expressed aversion to a "mini-budget" announced Friday.

Germany's DAX closed 0.9% higher, while France's CAC 40 was up 0.2%.

— Jenni Reid

Shares of German multinational conglomerate Thyssenkrupp fell 11% by mid-afternoon after JPMorgan reinstated its coverage of the stock with an "underweight" rating.

At the top of the European blue chip index, Britain's Hikma Pharmaceuticals jumped more than 8% by mid-afternoon.

- Elliot Smith

Sterling fell 1.4% against the dollar on Wednesday, sliding below $1.06 after the Bank of England intervened in the U.K. bond market to calm the recent market turmoil unleashed by the new government's so-called "mini-budget."

The Bank announced Wednesday that it would suspend the planned start of its gilt selling next week until Oct. 31 and begin temporarily buying long-dated bonds until Oct. 14., in an emergency program backed by the U.K. Treasury.

- Elliot Smith

The global economy is slowing considerably and may be inching toward a recession, Ngozi Okonjo-Iweala, director general of the World Trade Organisation, told CNBC's Julianna Tatelbaum.

"My worry is that all the indicators are going in the wrong direction," Okonjo-Iweala said at a WTO event in Geneva.

She noted recent downgraded global growth forecasts from the IMF, World Bank and OECD. She added that purchasing managers' indexes have cooled and ocean freight rates have dropped, which "could be a drop in demand which is signaling something untoward."

— Jenni Reid

The European Union pledged to deliver a "robust and united response" to a suspected act of sabotage after mystery gas leaks hit two underwater Russian gas pipelines.

"All available information indicates those leaks are the result of a deliberate act," EU foreign policy chief Josep Borrell said in a statement.

"We will support any investigation aimed at getting full clarity on what happened and why, and will take further steps to increase our resilience in energy security. Any deliberate disruption of European energy infrastructure is utterly unacceptable and will be met with a robust and united response," he added.

Here's the full story.

— Sam Meredith

The Bank of England will suspend the planned start of its gilt selling next week and begin temporarily buying long-dated bonds in order to calm the market chaos unleashed by the new government's so-called "mini-budget."

U.K. gilt yields are on course for their sharpest monthly rise since at least 1957 as investors flee British fixed income markets following the new fiscal policy announcements. The measures included large swathes of unfunded tax cuts that have drawn global criticism, including from the IMF.

In a statement Wednesday, the central bank said it was monitoring the "significant repricing" of U.K. and global assets in recent days, which has hit long-dated U.K. government debt particularly hard.

Read the full story here.

- Elliot Smith

The "almost unprecedented" fiscal measures announced by the British government "put the U.K. economy into a difficult situation," according to Ian Harnett, co-founder and chief investment strategist at research firm Absolute Strategy.

He also suggested that the policies make the Bank of England's position "almost impossible."

Harnett said that domestic companies – those in the FTSE 250 – "will be the ones that struggle," which is a point of concern for the U.K.

"When the markets see a crack they go for it in a big way and we see that crack being widened out in the U.K.," he told CNBC's "Squawk Box Europe."

— Hannah Ward-Glenton

Shares of German multinational conglomerate Thyssenkrupp fell 8% in early trade after JPMorgan reinstated its coverage of the stock with an "underweight" rating.

At the top of the Stoxx 600, Swiss pharmaceutical company Roche jumped 5.7% after a positive read-across from an Alzheimer's drug study by rivals Eisai and Biogen.

- Elliot Smith

Yields on 20-year and 30-year U.K. gilts pushed past the 5% mark on Wednesday as the extraordinary sell-off in U.K. fixed income market continued.

Bond yields move inversely to prices. The new government's so-called "mini-budget" on Friday sparked a wave of selling in British fixed income markets, with gilt yields now set for their biggest monthly climb since at least 1957, according to a Reuters analysis of both Refinitiv and Bank of England data.

- Elliot Smith

The new economic measures laid out by the U.K. government "will likely increase inequality," the International Monetary Fund said in a rare statement.

While the fiscal package — which included hefty tax cuts for Britain's highest earners — aims to help families and businesses handle the energy shock, the IMF does "not recommend large and untargeted fiscal packages at this juncture," a spokesperson said in a statement late Tuesday.

Read the full story here.

- Hannah Ward-Glenton

The benchmark U.S. 10-year Treasury yielded breached 4% for the first time since 2010 – after topping 3.9% overnight.

The yield on the policy-sensitive 2-year Treasury was at 4.2953%. Yields and prices have an inverted relationship. One basis point is equivalent to 0.01%.

–Jihye Lee

Credit Suisse says it's time to enter the green hydrogen sector, with a number of catalysts set to drive the clean energy powerhouse.

"Green hydrogen is a growth market — we increase our 2030 market estimates by [over] 4x," the bank said, forecasting that green hydrogen production will expand by around 40 times by 2030.

It names two stocks to play the boom — giving one upside of more than 200%.

CNBC Pro subscribers can read more here.

— Weizhen Tan

Neil Veitch, investment director at Edinburgh-based SVM Asset Management, says he expects the macro landscape to remain "quite difficult" for the remainder of the year.  

Speaking to CNBC Pro Talks last week, Veitch named the key drivers that could help the stock market to turn "more constructive" and shared his take on growth versus value.

CNBC Subscribers can read more here.

— Zavier Ong

The 10-year Treasury yield is edging close to 4%, a level it has not touched since 2010.

The U.S. 10-year is the benchmark yield that sets the course for home mortgage rates and other consumer and business loans. It has bounded higher this week, as U.K. gilt yields race higher and on expectations of an aggressive Federal Reserve.

The yield was at 3.96% in afternoon trading. The 10-year yield reversed an earlier decline and gained about basis points. (A basis point equals 0.01 of a percentage point)

"It's definitely been impressive, and I just think no one is yet willing to step in and catch the falling knife," said Ben Jeffery of BMO. He added a lack of liquidity has also been pushing up yields, which move opposite price.

Jeffery said the yield was also moving higher ahead of the 1 p.m. auction of 5-year notes.

He said the 10-year tested the 4% level in 2010. "The last time we were sustainably above 4% was 2008. There's another technical level at 4.10% and then there's not much of note until 4.25%," he said.

— Patti Domm

European markets are set to open in positive territory Wednesday, building on gains seen since the start of the week.

The U.K.'s FTSE 100 index is expected to open 40 points higher at 8,084, Germany's DAX up 60 points at 18,201, France's CAC 20 points higher at 8,130 and Italy's FTSE MIB up 206 points at 34,331, according to data from IG.

Earnings come from Orange, Air Liquide, Iberdrola, Roche and Heathrow. Data releases include Germany's Ifo Institute's survey on business conditions and expectations for April.

— Holly Ellyatt