Bonds - GBP
Volume of 300K in the future and rallies of 30-40bps in red and green SONIA futures, linkers and the 10y gilt tell their own story today.
The market reaction to today's 50bps hike by the MPC shows that the market had bet on a dovish hike, and thinks it won as BOE hints at peak.
About 3/4 of economists expect the MPC to hike rates by 50bps tomorrow but a minority of pre-cogs look for the Bank to start slowing down.
There was some support for the front-end from mortgage data but gilts today largely followed elsewhere, twitches and all. Morrisons buys in.
The first active QT sale of ultralong APF gilts landed in successful style after the market was surprised by Spanish inflation that nobody expected.
A raft of data floated across the Atlantic, but failed to make waves in a pacific market. RBC suggests a livelier week. BNPP says pay the fly.
Strange conditions continue to grip the gilt market, with traders describing activity in terms such as “calm” and even "sensible." HSBC eyes LDI bids.
Front end RPI was dumped for a second day. The new 2053 gilt cheapened a touch on the curve. And banks look for a dovish hike next week.
Weak data added to gilt strength as the larger-than-expected 2053 syndication was well received.
The gilt held in its recent range, 10s/30s gyrated but finished steeper and asset swaps richened as the market waited for the 2053 syndication.