{"id":35369,"date":"2022-09-28T16:50:00","date_gmt":"2022-09-28T15:50:00","guid":{"rendered":"https:\/\/youtrading.com\/en\/?p=35369"},"modified":"2022-09-29T09:32:24","modified_gmt":"2022-09-29T08:32:24","slug":"market-wrap-boe-announce-bond-program","status":"publish","type":"post","link":"https:\/\/youtrading.com\/en\/market-wrap-boe-announce-bond-program\/","title":{"rendered":"Market Wrap &#8211; BoE announce bond program"},"content":{"rendered":"\t\t<div data-elementor-type=\"wp-post\" data-elementor-id=\"35369\" class=\"elementor elementor-35369\" data-elementor-post-type=\"post\">\n\t\t\t\t\t\t<div class=\"elementor-inner\">\n\t\t\t\t<div class=\"elementor-section-wrap\">\n\t\t\t\t\t\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-4c249e0 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"4c249e0\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t\t\t<div class=\"elementor-row\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-ffd4f3a\" data-id=\"ffd4f3a\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-column-wrap elementor-element-populated\">\n\t\t\t\t\t\t\t<div class=\"elementor-widget-wrap\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-25d4f32 elementor-widget elementor-widget-text-editor\" data-id=\"25d4f32\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t<div class=\"elementor-text-editor elementor-clearfix\">\n\t\t\t\t<p>Due to price volatility and uncertainty over the recent UK budget the Bank of England announced today that they are launching a temporary bond-buying programme as it takes emergency action to prevent &#8220;material risk&#8221; to UK financial stability.<\/p><p>These moves were taken as the British pound currency plunge across the foreign exchange market and hit a new all-time price low against the US dollar currency.<\/p><p>Details emerged that the UK central bank would buy as many long-dated government bonds as needed between now and 14 October in a bid to stabilise financial markets.<\/p><p>Investors basically have demanded a greater rate of return for UK government bonds in the wake of uncertainty towards the fiscal capacity of the UK government.<\/p><p>The recent budget by the new UK Chancellor presented tax cuts and energy aid for households and businesses. Basically, this panicked financial markets, who questioned the sustainability of the public finances.<\/p><p>In reaction to today\u2019s QE announcement, we have seen a recovery in the <a href=\"https:\/\/bit.ly\/3S5ruCW\" target=\"_blank\" rel=\"noopener\">FTSE100<\/a> and also a drop in bond yields, which is what the central bank had essentially been hoping for.<\/p><p>Touching more in-depth on bond moves the UK 10-YEAR moved a massive 26 basis points as it fell from 4.00 to 3.76 in the aftermath of the decision.<\/p><p>The 30-year gilt yield slumped to 4.4%, from well above 5% this morning. The bank also reiterated in the statement that it &#8220;will not hesitate&#8221; to change interest rates by as much as needed to return to the 2% target.<\/p><p>Interestingly, the British pound showed only a muted reaction to the news. <a href=\"http:\/\/bit.ly\/2Zn4HaM\" target=\"_blank\" rel=\"noopener\">GBPUSD<\/a> is up on the day marginally. QE has not typically been a friend to domestic currencies when it has been implemented.<\/p><p>The central bank said, \u201cThe purchases will be carried out on whatever scale is necessary to effect this outcome.&#8221;\u00a0 It said they will be strictly time limited and last until 14 October.<\/p><p>The central bank also said that it had been monitoring the significant repricing of gilts in recent days and was ready to &#8220;restore market functioning and reduce any risks from contagion&#8221; to UK households.<\/p>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"<p>Due to price volatility and uncertainty over the recent UK budget the Bank of England announced today that they are launching a temporary bond-buying programme as it takes emergency action to prevent &#8220;material risk&#8221; to UK financial stability. These moves were taken as the British pound currency plunge across the foreign exchange market and hit [&hellip;]<\/p>\n","protected":false},"author":4,"featured_media":27290,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[2],"tags":[56,57,20],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v17.6 (Yoast SEO v20.11) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Market Wrap - BoE announce bond program - Youtrading UK<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/youtrading.com\/en\/market-wrap-boe-announce-bond-program\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Market Wrap - BoE announce bond program Market Wrap - BoE announce bond program\" \/>\n<meta property=\"og:description\" content=\"Due to price volatility and uncertainty over the recent UK budget the Bank of England announced today that they are launching a temporary bond-buying programme as it takes emergency action to prevent &quot;material risk&quot; 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