Bonds - GBP
A day of strong moves in gilts either side of supply and demand bursts saw sterling fixed income follow the risk-off trend. Ahead of the MPC.
Another month in Covid Year One ended with a scheduled newsflash today as the good people of the DMO unleashed their latest mega-issuance plans.
In a year of statistical firsts a flatter basis swaps curve will not earn a ‘Bong’ moment on the ITV news, but gamma flow is weighing heavily upon it.
News from the DMO left nominal gilt traders unmoved, while talk of a linker syndi has served to remind some that things can get better.
After last week was headlined by structural flow in 40y gilts. rates have traded in tight ranges this week and the flow is in long dated SONIA-BOR.
Nominals ended a day of range-trading a bit firmer. B/Es bull-steepened amid bids in the front end and switches out of linkers.
Cometh the hour, cometh the Canadian. An embarrassing lack of issuance as been partly filled by Canadians. Elsewhere, traders fear for Dim Sums.
Traders link the underwhelming gilt auctions to absent market makers and a well-offered long-end APF in recent days.
What a tricky century this is. 10y Gilts have rallied 576bps and there's still a long way to go. Traders today note 10y interest and record levels.
A slightly summery week in terms of flow in the GBP fixed income market saw participants focused on LIBOR fixes, DMO supply and flow.