Get Ready for Round Two of the BOE’s Battle for Long Bonds
- Central bank is seeking bonds due in more than 15 years
- Last week’s operation failed to attract enough sellers
Bell: U.K. Equity Rally Spurred on by Low Bond Yields
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To fail once with a bond-buying auction may be regarded as a misfortune; were the Bank of England to fall short a second time, it wouldn’t be so easily dismissed.
The BOE couldn’t find enough sellers of long-dated gilts in the first week of its expanded quantitative-easing program, and Tuesday sees the central bank again seeking 1.17 billion pounds ($1.5 billion) of debt due in more than 15 years. While purchases of shorter-maturity bonds drew an abundance of offers, longer-term debt is mostly owned by pension funds and insurers, who, analysts say, are less likely to sell.