The Bank of England surprised markets and announced it would purchase long-dated government debt in any quantities necessary to restore order to the market. The policy shift comes three business days before the central bank was expected begin quantitative tightening and sell bonds. US Treasuries briefly eclipsed a 4% yield overnight on 10s but rallied in sympathy with European debt post announcement. Ahead of the open, S&P500 futures have rebounded 0.40% and 10-year Treasuries extended the rally 9 bps to 3.85% ahead of today’s 7-year auction. Federal Reserve leaders Raphael Bostic and Charles Evans continue this weeks loaded speaker schedule before focus shifts to Thursday’s jobless claims report.
Chris Eckhoff
Director, Investment Management Group
To view ALM First’s full daily market commentary, please click here.