.jpg)
3m ago
14.02
The pound is off the day’s lows, and is now trading
0.6% lower at $1.0667.
Mike Owens,
global sales trader at Saxo Markets, says:
The Bank of England have announced they are to
carry out temporary purchases of long dated UK bonds until 14th October to help
alleviate current financial conditions and at the same time delay the sale of
gilts until October 31st in what will then mark to the beginning of tightening.
The BoE say the purpose of this is to restore orderly conditions and aimed to
be very targeted based on the issues effecting UK financial markets following
the ‘mini-Budget’ from the new Truss government.
This move from the Bank of England won’t stem
moves against the UK debt and currency markets on their own. It’s a narrowly
defined intervention that hopes to dampen the current shocks.
We’re told that the Bank is meeting with the
Treasury routinely week-on-week, and so now the focus will swing back to how
the government plan to convince the market that their expansionist policy will
provide the growth necessary to balance the UK’s finances.
Victoria
Scholar, head of investment at interactive investor, says:
Although the central bank refrained from an
emergency rate hike to offset the slide for sterling in FX markets, it has now
intervened in the bond market. Yields dropped in response with a flattening of
the yield curve and long-dated bonds rallying. The financial policy committee
has a mandate to ensure the stability of the financial system which is why it
has stepped in today by buying 30-year gilts.
The intervention has resulted in some respite for
this week’s bond market volatility. The Bank of England has demonstrated its
resolve to restore order to fixed income markets.
The monetary policy committee is expected to
carry out a jumbo rate hike at the start of November but the pound remains
under pressure. Despite a brief pause in the selling yesterday, the downtrend
for cable continues with sterling-dollar shedding more than 20% this year.
8m ago
13.57
Here’s a
bit more on the meeting between Kwarteng, and the financial secretary, Andrew
Griffith, with executives from the investment banking sector, as part of a
series of roundtables ahead of the chancellor’s financial services deregulatory
package next month.
The
chancellor discussed with the bankers how last Friday’s growth plan will expand
the supply side of the economy through tax incentives and reforms.
Ahead of
the upcoming “Big Bang 2.0 deregulatory moment for financial services,”
Kwarteng reiterated that “a strong UK economy has always depended on a strong
financial services sector.”
Among the
attendees were executives from Bloomberg, the London Stock Exchange, the London
Metal Exchange, UBS, Bank of America, Standard Chartered, Morgan Stanley, Citi,
Deutsche Bank, JP Morgan Chase & Co and Rothesay.
Sem comentários:
Enviar um comentário