U-turn sparks huge turn

Sept 28 (Reuters) - A look at the day ahead in Asian markets from Jamie McGeever Investors might not often pay much heed to Vladimir Lenin, but they would surely agree with the Soviet revolutionary's 1917 observation that: "There are decades where nothing happens; and there are weeks where decades happen."

Take Britain, where a government budget on Friday sparked a run on the pound and gilts, accelerated the downdraft across world markets, before prompting an astonishing policy U-turn from the Bank of England on Wednesday.

The BoE - which is raising rates and had been about to start 'QT' sales of gilts back into the market - intervened in bonds, pledging to buy unlimited quantities on a "temporary" basis to restore order in what was effectively a broken market.

This unleashed a wave of buying across British assets - the 30-year gilt yield sank a record 100 basis points and sterling rose 1.5% - and triggered a pent-up recovery across world markets.

The relief was palpable: world stocks and the S&P 500 snapped six-day losing streaks, with the S&P 500 jumping around 2%. The 10-year U.S. Treasury yield, which had topped 4%, plunged 25 bps in its biggest one-day fall since 2009.

But how long will the relief last? Investors' faith in policymakers' credibility must surely be dented, and the underlying tightening of financial conditions from the strong dollar and high U.S. bond yields remain in place.

Then there's China. The People's Bank of China on Wednesday said FX market stabilization is its top priority after the yuan weakened to its lowest level since 2008. Its tinkering at the edges seems to have failed, so will it soon have to take more forceful action to support the yuan?

Key developments that could provide more direction to markets on Thursday:

U.S. final GDP and PCE (Q2)

U.S. weekly jobless claims

Fed's Daly speaks

ECB's De Guindos, Rehn, Panetta speak

BoE's Ramsden speaks

U.S. 10-year Treasury yield Link

Reporting by Jamie NcGeever in Orlando, Fla.; Editing by Josie

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