The BlackRock Enhanced Capital and Income Fund, Inc. (CII) is experiencing downward pressure due to a combination of macroeconomic factors affecting its underlying assets. The recent decision by the Bank of England to maintain interest rates at 4.75% reflects ongoing inflationary pressures, with inflation rising to 2.6% in November. This decision has led to a rise in gilt yields, which inversely affects bond prices, contributing to a decline in the capital value of bond investments. Additionally, the Federal Reserve's recent 25 basis point rate cut to a range of 4.25-4.5% has been accompanied by a hawkish outlook, suggesting a slower pace of future cuts. This has resulted in falling bond prices and rising yields globally, further impacting fixed income markets.
The CII ETF is down 4.52% in pre-market hours on Friday, December 20, falling to $18.61 as of 6:03 AM ET.