Updated at 9:53AM EST
US stocks moved slightly higher on Wednesday, potentially cutting Wall Street’s longest losing streak in more than two years, as bond yields tumbled worldwide after a surprise intervention in gold markets from the Bank of England.
The move, portrayed as an attempt to restore stability in financial markets, will see the central bank buying government bonds in the £2.1 trillion government bond market amid a historic decline in sterling.
Moody’s Investors Service said the UK’s credit rating is at risk from government plans to increase borrowing by about $80 billion in order to pay tax cuts, while media reports indicated the government is telling banks not to bet on the pound as it approaches. Historic lows against the dollar at 1.0665 even after the unprecedented BoE intervention.
However, UK benchmark 30-year bond yields fell more than 1% after the Bank of England’s announcement, the biggest one-day drop since 1992, while 10-year notes fell 40 basis points at 4.07%.
In fact, global equities are trading at their lowest in more than two years as the dollar – a major benefactor of risk-off sentiment – continues to print new twenty-year highs against other global currencies.
The US dollar index, which measures the greenback against a basket of six global currencies, rose 0.2% in overnight trading at 114,303 while the 10-year Treasury yield, which exceeded 4% for the first time since 2008, fell overnight to 3.832% after The Bank of England revealed its plans to intervene.
The relentless rise of the dollar added further downward pressure on oil prices, which were also in the red as traders slashed near-term demand from some of the world’s largest energy buyers, sending WTI close to $78 a barrel, It is the lowest level in 9 months, during the overnight dealings.
However, Hurricane Ian’s path still indicated at least some disruption to rigs in the Gulf of Mexico, although a Category 4 storm was now expected to hit the west coast of Florida later today before sweeping north through the state toward the Atlantic Ocean. Early Thursday morning.
Market volatility also returned with a vengeance as the Vix Index, aka Wall Street’s “fear gauge” jumped 2.1% in early trading to a six-month high of 33.27 points.
In Europe, the region-wide Stoxx 600 is down 1.2% in early Frankfurt trading while the UK’s FTSE 100 is down 0.83%.
Stocks on Wall Street, which closed at their lowest level in November 2020 last night amid their longest losing streak in more than two years, looked firmer in the first trading hour, with the S&P 500 up 12 points.
The Dow Jones Industrial Average rose 110 points while the technology-focused Nasdaq gained 11 points.
Biogen (Bahrain Islamic Bank) Shares were the main driver in the market, rising more than 43% after the drugmaker and its Japanese partner, Eisai Co Ltd, reported better-than-expected results from its late stage Alzheimer’s treatment development.
apple (AAPL) Meanwhile, stocks led the S&P 500 index lower, dropping more than 4% after a report that the world’s largest technology company would cancel plans to boost iPhone production amid waning consumer demand.
