September 29 financial breakfast: the Bank of England will buy treasury bonds to save the market, risk aversion heated up, gold prices soared nearly 50 U.S. dollars, oil prices jumped 5%

By    8 Oct,2022

The dollar index traded near 112.7; the dollar retreated on Wednesday, having earlier hit a 20-year high of 114.79, and the pound rebounded higher against the dollar reversing its selloff after the Bank of England announced it would buy U.K. Treasuries; the dollar and Treasury yields retreated, and gold prices rebounded, once pulling nearly $50 higher; oil prices jumped 5%, back above the 80 mark, with U.S. fuel inventory data showing a larger-than-expected drop , consumer demand rebounded.


U.S. stocks closed: The Dow Jones Industrial Average rose 1.88% to close at 29,683.74 points, the S&P 500 rose 1.97% to 3,719.04 and the Nasdaq jumped 2.05% to 11,051.64 points.

Commodity closing conditions: Brent crude oil futures closed up 3.5% at $89.32 per barrel. U.S. crude oil closed up 4.7 percent at $82.15 per barrel. U.S. gold futures closed 2.1 percent higher, settling at $1,670.00.

Thursday's Outlook

16:00 ECB Vice President Guindos speaks; 21:30 Fed's Bullard speaks on the U.S. economic outlook.

Global markets at a glance

U.S. stocks closed sharply higher on Wednesday after a recent sell-off, helped by lower U.S. Treasury yields, but Apple fell on concerns about iPhone demand. The S&P 500 index rose for the first time in seven sessions, closing Tuesday at its lowest level since late 2020.

Interest rate-sensitive giants Microsoft, Amazon, and Meta Platforms surged after the yield on the 10-year U.S. Treasury note fell more than 26 basis points, the biggest one-day drop since 2009. 

The Bank of England said it would buy long-term British government bonds to restore financial stability after the new government's fiscal policy sent shockwaves through global markets. The news pushed yields on six-month and longer-dated U.S. bonds lower.

Art Hogan, chief market strategist at B. Riley Wealth, said, "The two-year U.S. bond yield has continued to climb over the last couple of weeks and for the first time we've seen that yield fall for two days in a row, which has given stocks a breather."