There was a Gilts sell off after the BoE announcement and the pressure on wider markets intensified after the decision, which showed 3 MPC members voting for a 50 bp hike. Markets were already spooked by the unexpected 50 bp move from the SNB this morning and 10-year rates are now up 24.1 bp in Switzerland, 24.5 bp in Germany and 22.4 bp in the UK.
The UK rate has jumped 19.4 bp to 3.477% now. Eurozone peripherals are outperforming, suggesting that the ECB’s signal on a new crisis tool to keep a lid on spreads is helping – at least for now. Stock markets are selling off in this environment, with the GER40 down -2.9%, the UK100 -2.6% and US futures also sharply lower led by a -2.9% correction in the USA100.
Click here to access our Economic Calendar
Head Market Analyst
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.