Inflation - GBP
Today’s upsized $16bn new 10y TIPS auction (Jul31s) cruised smoothly into the station, providing BEs a lift off the pre-auction lows to end mixed.
Gilts mostly shrugged off bullish words from BOE bigwig Ben Broadbent only to rally anyway. 5y ASWs widened.
BEs rebounded nicely once again as nominals got clobbered amid another risk-on session. Dealers see RY concession needed for 10y auction tomorrow.
The front end of the UK inflation curve stays stubbornly rich as the impact of the June data print lingers on.
BEs largely recovered from yesterday’s Tyson-like knock-out punch as equities/energy rebounded nicely today.
Front-end BEs are losing some of their luster after today after CPI kept them largely afloat, while longer tenors post modest gains.
A late squeeze added to the gilt market’s bounce-back bringing 10y gilt yields near to recent lows. Traders eye 20y ASW flow. BofA looks at July 19.
Longer tenor BEs sulked under the weight of the torrid nominal bull-flattener. Import prices hit the tape. New 10y TIPS supply announced.
BEs lost all their gusto coming out of yesterday’s rock-solid CPI release yesterday despite an added assist from a rock-solid PPI today.
Inflation data caught the sterling rates market unaware today but volumes are light as traders unpick the impact.