Hunt, BoE Governor to cut maximum size of APF

In exchanged letters between the BoE governor and the UK finance minister regarding asset purchase programme, there was a mention of the official intention to looming cutting of the maximum size of the Asset Purchasing Facility, APF.

The maximum size of the APF authorized has been cut to GBP871 bln, of which GBP16.4 bln can be corporate bonds. The BoE has already confirmed an existing plan to continue with the gilt sales operation from November 1 on.

As for Q422 APF sales, operations will be distributed evenly across the short and medium-maturity sectors, with the sales‘ pace and frequency in line with the original plans in place. The maturity split of gilt sales for subsequent quarters will be considered ahead of Q1 2023. The detailed auction calendar will be released on Oct 20.”

The GBP/USD pair surged on Tuesday amid positive risk appetite one day after falling in the previous session, as the dollar retreated following three days of gains.