Inflation - GBP
BEs nudged a little higher with a strong PPI providing a green light against an inflation-friendly/neutral backdrop. CPI is now on the horizon.
An early sell-off partly-reversed as the 10s30s curve again refused to follow the steepening in the US amid supply rumours. CPIH faces a challenge.
Today’s Fed TIPS purchase helped support front-end BEs but the bull flattening nominal rally weighed on longer tenors.
BEs snapped back higher today after yesterday’s flow-driven hiccup. Inflationistas eye tomorrow’s Fed TIPS purchase operation.
RPI gets a boost from QAH's linker with traders reflecting on the 'beauty' of the UK inflation market. Meanwhile breakevens take a breather.
BEs sellers emerge today as an energy rally lost much of its upward momentum intraday while nominal yields ground lower in the backdrop.
A low volume session saw gilts rise from early lows alongside USTs. Long nominals outperformed a touch and the B/E curve ended tighter and flatter.
Gilt yields followed USTs north and B/Es sold off by around a bp as linkers failed to eat to the beta.
Bear-flattening reversed this afternoon as flows faded. Traders eye liquidity, as does the BOE, which is also busy examining inflation forecasting.
Oil sold off sharply despite continued Suez Canal paralysis. However, BEs ultimately ignored Black Gold and rallied nevertheless.