Investors on Wednesday piled into US stocks and government bonds, following a rally in UK assets after the Bank of England intervened to calm turmoil in the gilt market.
The central bank on Wednesday announced it would buy long-dated gilts in light of the recent “significant repricing” of UK government debt. “Were dysfunction in this market to continue or worsen, there would be a material risk to UK financial stability,” the BoE said.
Thirty-year gilt yields, which earlier on Wednesday touched a 20-year high of more than 5 per cent, fell to 3.94 per cent. The long-dated debt posted its sharpest drop in yields for any single day on record, according to Tradeweb data. Yields on 10-year UK debt fell to 4.01 per cent from 4.59 per cent. Yields fall as investors buy the bonds, boosting prices.