The Bank of England (BOE) announced in a statement on Tuesday, it will temporarily pause corporate bond sale operations this week.
Additional takeaways
Intends to purchase index-linked gilts
Purchase of linkers will take effect from Oct 11 to Oct 14
Linker purchases will act as backstop to restore orderly market conditions
Linker purchases are time-limited, indemnified by treasury
Has consulted with debt management office
Repeats that it stands ready to purchase up to 10 bln stg of gilts each day
Purchase of long-dated conventional gilts unaffected by latest announcement on linkers
Size of each linker purchase operation will be up to GBP5 bln.
Will set minimum yield that will be applied to temporary purchases of linkers.
Will not allocate offers for linkers at real yields below levels observed at close on Monday.
Would be likely to accept most offers above market mid-yields at close of linker purchase operation.
Purchase of linkers to take place at 1315-1345 GMT, conventional long-dated 1415 GMT to 1445 GMT.
Intends to purchase linkers with residual maturity of three years and above.
Market reaction
GBP/USD is fading its bounce, battling 1.1000 on the BOE headlines. The cable jumped to near 1.1040 after the mixed UK jobs report. The spot is down 0.43% on the day.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD clings to gains above 1.0750 after US data
EUR/USD manages to hold in positive territory above 1.0750 despite retreating from the fresh multi-week high it set above 1.0800 earlier in the day. The US Dollar struggles to find demand following the weaker-than-expected NFP data.
GBP/USD declines below 1.2550 following NFP-inspired upsurge
GBP/USD struggles to preserve its bullish momentum and trades below 1.2550 in the American session. Earlier in the day, the disappointing April jobs report from the US triggered a USD selloff and allowed the pair to reach multi-week highs above 1.2600.
Gold struggles to hold above $2,300 despite falling US yields
Gold stays on the back foot below $2,300 in the American session on Friday. The benchmark 10-year US Treasury bond yield stays in negative territory below 4.6% after weak US data but the improving risk mood doesn't allow XAU/USD to gain traction.
Bitcoin Weekly Forecast: Should you buy BTC here? Premium
Bitcoin (BTC) price shows signs of a potential reversal but lacks confirmation, which has divided the investor community into two – those who are buying the dips and those who are expecting a further correction.
Week ahead – BoE and RBA decisions headline a calm week
Bank of England meets on Thursday, unlikely to signal rate cuts. Reserve Bank of Australia could maintain a higher-for-longer stance. Elsewhere, Bank of Japan releases summary of opinions.