BOE expands QE GBP150bln, Sunak's furlough scheme and FOMC in focus

Treasuries and Bunds have ground gradually higher this morning but the real story has been in gilts with the BOE meeting this morning and expanding QE by GBP150bln. This was more than the GBP!00bln expected by the market but the pace of purchases was in line with the current and in line with expectations. We have seen gilts rally on the open and then largely retrace these moves at the 10-year level but the flattening impact remains. We note that Chancellor Rishi Sunak will deliver a statement on the changes to the furlough scheme later today.

• The FOMC meeting later will also be closely watched. The meeting is largely important to set up expectations for the December meeting but we note that any references to changing expectations of fiscal stimulus would be very important.
• TY1 futures are up 0-5 today at 139-04+ with 10y UST yields down -3.5bp at 0.730% and 2y yields up 0.1bp at 0.148%.
• Bund futures are up 0.06 today at 176.46 with 10y Bund yields down -0.7bp at -0.646% and Schatz yields up 0.3bp at -0.796%.
• Gilt futures are up 0.05 today at 136.32 with 10y yields down -0.4bp at 0.202% and 2y yields up 1.2bp at -0.66%.