Using changes in auction maturity sectors to help identify QE impact on gilt yields | Forex Factory

  • Using changes in auction maturity sectors to help identify QE impact on gilt yields

    From voxeu.org

    The policy decisions of several of the world’s largest central banks turn on a tricky empirical judgement – the effect of quantitative easing purchases on government bond yields. In the UK, the empirics have got much harder. When QE was first introduced, the UK Monetary Policy Committee (MPC) announcements about the amount of assets the Bank of England intended to purchase contained significant news for market expectations. As such, market reaction to these announcements could be used to estimate the effect of QE on gilt yields (for example see Joyce et al. 2011). Over time, market participants learned how the ... (full story)

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brucewhain
Aug 21, 2012 12:01am
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An important piece of legerdemain... for us important people who are intelligent enough understand it. But waitaminute... didn't they say the BOE had reduced what they say in their "market events" so as to prevent too much speculation in gilts by the hoi-po-loi? So how come now - that is assuming we are able to understand and duplicate their monthy thingie chart - these folks from the BOE are offering to show us a way to predict gilt prices from the new limited info "market events"?

Further: does (note the small "d" that's the English way, small after the colon) anyone worth less than a billion lbs. speculate in gilts?
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