BOE Governor Andrew Bailey revives risk aversion

Bank of England Governor Andrew Bailey spurred some risk aversion in the American afternoon, referring to the latest monetary policy measures to stabilize the financial system.

Bailey noted unprecedented volatility in the long end of the gilt market. Early on Tuesday, the Bank of England (BOE) introduced additional measures to improve financial market conditions. The central bank will temporarily pause corporate bond sale operations this week while it intends to purchase index-linked gilts up to GBP5 bln. 

Bailey added that they saw quite a serious crystallization of risk, but also remarked that they would be out of the market by the end of the week. Finally, Bailey has given three days to pension funds to rebalance, as they have the resources they require to do so. 

GBP/USD plunged on the news, now trading at around 1.1045.