ECB’s Targeted TLTRO Tweaks Set to Drain Excess Market Liquidity

Exclusive insight for TMI subscribers! Northern Trust Asset Management share a monthly market commentary for treasurers.

UK Market Update

The fallout from September’s UK “mini budget” led to the resignation of Chancellor Kwasi Kwarteng and then Prime Minister Liz Truss. Jeremy Hunt replaced Kwarteng as Chancellor and reversed most of the fiscal loosening his predecessor had announced. Former Chancellor Rishi Sunak was named the new PM, with Hunt retained as Chancellor in Sunak’s Cabinet reshuffle. The Bank of England (BoE) launched a Temporary Expanded Collateral Repo Facility to ease liquidity pressures facing liability-driven investment (LDI) funds. To further quell market volatility, the bank expanded its purchases to include inflation-linked gilts in its mandate. The UK’s CPI print of 10.1% saw a significant increase in food and raw materials. Throughout October, the UK’s end-of-year implied interest rate fell from 4.63% to 3.57%.

Download our Free Treasury App for mobile and tablet to read articles – no log in required.

Download Version Download Version