Inflation - GBP
Today’s 10y TIPS re-opening was not a home run, but a decent triple. BEs opened up better bid but lost altitude intraday to end mixed.
USTs have flipped steeper as longer tenors reel from the lingering fallout after yesterday’s FOMC decision. 10y TIPS auction views.
BEs gave a thumbs down today’s ‘hawkish hold’, gapping lower on the headlines/presser. Attention now turns to the 10y TIPS re-opening tomorrow.
Nominals tested/hit new multi-decade lows but RY sellers were in the mix too, leaving BEs just marginally higher. Some see inflation risks lurking.
PPI came in hotter-than-expected, helping to spark a nominal sell-off that left BEs modestly higher.
BEs popped higher on a largely consensus CPI print only to sink lower as fast money accounts sold into the strength.
On the eve of the August CPI release, short-end BEs got a lift from higher oil prices while longer tenors relinquished early gains.
The gilt market showed its feisty side again as optimism won the session, albeit without fully convincing.
Despite another batch of hotter-than-expected data, rates reversed lower with TIPS outpacing nominals.
An initial beta-driven pop in BEs was largely faded, leaving BEs narrowly mixed and flatter on the day.