Sentiment is improving on global equities, following yesterday’s intervention by the Bank of England and the positive close of Wall Street. The Dow Jones was up 548.75 points, or + 1.88%, to 29,683.74, while the S&P 500 rebounded 1.97% to 3,719.04, after testing a new low in Tuesday’s session. of the year and its bear market phase. The Nasdaq Composite was up 2.05% to close at 11,051.64.
Yesterday the Bank of England announced that it will suspend the start of the UK government bond disposals it had planned for next week by temporarily purchasing long-term gilts in order to counter the market chaos:
chaos that has been caused by the decision of the government of Liz Truss to launch a maxi fiscal bazooka of tax cuts that economists and strategists do not consider sustainable. The BOE effect was quickly priced by the gilts, with 10- and 30-year yields immediately slipping more than 30 basis points after the announcement. The move by the UK central bank has also eased tensions in the US government bond market: after jumping to the last 14-year record of more than 4%, 10-year US Treasury rates reported the strongest daily loss from 2020, slipping up to 3.816% After the strong recovery on the eve, Wall Street is however heading downwards, with negative futures, which suffer losses between -0.09% of the Dow Jones and -0.30% of the Nasdaq. Positive Asian stock exchanges, with the Nikkei 225 index of the Tokyo stock exchange rising by 1%, as well as the Hong Kong and Seoul stock exchanges, Shanghai + 0.28%, Sidney the best with a jump of almost + 2% .