Live Analysis 28th September 2022

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Haven demand is helping boost Treasuries amid worries over a financial crisis in the UK, exacerbated by the BoE’s decision to purchase longer dated Gilts. The further dive in equities is adding to the flow into Treasuries. The market was also looking oversold.

The front end of the curve is outperforming in a classic move with the 2-year yield down 16 bps at 4.125%. Yesterday’s richening broke a record string of 13 straight sessions of higher rates. The wi 7-year is down 9.5 bps to 3.995%. The 10-year has richened 6.5 bps to 3.880% after testing 3.99% Tuesday. It has not closed with a 4-handle since December 2007. The bond is down 2 bps to 3.806%. The traditional haven, Gold, is also firmer, up 0.38% to $1635. Meanwhile, Wall Street has bounced from earlier losses and is mixed. The Dow future is up 0.47%, with the S&P 0.27% higher, while the NASDAQ is down -0.11%. The DXY Dollar Index has been all over the board, though inside a relatively narrow range. Currently it is at 114.259, heading back toward the 114.08 low, having slid from the intraday peak of 114.778. Along with the tumult in the UK, the Buck benefited from news out of the White House that suggested there would be no currency agreement to cap the ascent of the Greenback.

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Andria Pichidi

Market Analyst

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