Inflation - GBP
BEs finally hit the pause button today after a torrid run this week that easily sliced through the $19bn in new 5y TIPS supply yesterday.
A lively Friday saw 30s/40s, futures and 5y all catch the eye as gilts surged after dovish words from the MPC's new diversity spokesman.
BEs continued to bull-flatten straight into and out of today’s soild $19bn 5y TIPS auction, undeterred by rich RY and BE valuations.
Yet another lively trading session saw the second Green gilt leave the tarmac, after a slight delay, and B/Es go ballistic.
BEs continued to bull-flatten with a vengeance, with valuations at new multi-year highs heading into tomorrow’s 5y TIPS auction.
A partial recovery at the front of the short sterling strip was accompanied by post-data gains across the inflation curve today.
After getting knocked out of flight upon take-off yesterday, BEs reached very minimal altitudes today. Focus shifts to the 5y auction on Thursday.
A volte-face by the good people of the DMO (as well as its syndication team) attracted conspiracy theories as Greens turned amber.
BEs used CPI tailwinds, risk-on sentiment and higher energy prices to continue recent bull-flattening. PPI hit the tape. 5y TIPS auction announced.
Despite threats of more expensive industrial chicken products in the future (and a fresh jump in RPI swaps), one MPC member stuck to her guns.