Daily Market Color

BoE Market Intervention Cutoff Spurs Selloff  

Rates rise after BoE promises removal of market support. Swap rates and Treasury yields rose across a steepening curve today, fueled by the BoE’s announcement that it will halt its market intervention at the end of the week. The announcement saw the 2-year yield rise ~1 bp to 3.14%, while the 10-year yield rose ~6 bps to 3.945%. Equities felt the pain of the market selloff, with S&P 500 taking a 0.65% loss and NASDAQ suffering a 1.10% decline.

European Union (EU) nations work to cut energy costs. Germany and the Netherlands are working to lower EU energy costs. The extensive plan should impact the way EU nations bid against each other for gas, as well as address systemic issues such as Europe’s reliance on gas for electricity. Gas prices have declined in the past few months but are still significantly higher than pre-war levels. Developing EU responses to gas shortages will have an impact on global energy prices, a key driver of inflation.

Day ahead. Monthly PMI for September will be released at 8:30 AM ET, which will be followed by Fed minutes at 2:00 PM.

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