Inflation - GBP
BOE Governor Bailey defended the MPC in this time of ballooning inflation, allowing gilts and linkers to retain gains at the close. BofA eyes RPI.
Gilts staged a bearish reversal while traders discuss 5y ASWs. And RPI reform - the topic that won't die - is being challenged. Barclays explores.
PPI continued to beat the dead horse inflation narrative, but BEs traded off against a shaky risk tone and continued lingering sellers.
Today saw the end of something new and the beginning of something old. Equities and fixed income split, with fixed income exiting the falling plane.
BEs popped higher after a stronger than expected April CPI proved the inflation beast has yet to be tamed.
Gilts took a lengthy round trip today eventually recovering all their post-US CPI losses to leave the sterling curve lower and steeper.
BEs bear steepened as continued better selling into the CPI data overshadowed the stabilization in broader risk sentiment.
BEs weathered today’s post-FOMC about-face in sentiment fairly well with the major mover being RYs that sharply repriced higher along with nominals.
BEs joined other asset classes in a post-FOMC relief rally after Powell downplayed 75bps hikes.
BEs take one small step forward after recent ransacking with continued late-day selling kept the rebound relatively capped.