Bonds - GBP
Traders said that sterling market activity today, and for previous sessions, has been very much a tale of two wings.
A moment of clarity hit the linker market today in reaction to news that the consultation over RPI reform has been postponed.
Gilts bull-flattened but still underperformed against Bunds and Treasuries to start 2020. Inflation widened in the wings.
As LDI buyers of gilts start to drift into their Christmas escapes, so too has the bid in long gilts faded away, leading to a gentle steepening.
With fears of a year-end liquidity squeeze ebbing fast, the very front end of the core basis swap markets all leapt higher this morning.
December 12 is of course Frank Sinatra’s birthday, and it could prove a date when many-a-trader will regret having done somethin' stupid ahead of it.
Even as gilts fell 60 ticks on trade/election hopes, some of the most interesting action was in long end SONIA-BOR.
Ten-year gilts soared today thanks to a combination of supply factors, Trump and politics. Elsewhere, there are worries about Boris.
A narrowing in the opinion polls between Labour and Tory in the recent polling has not been reflected in 30y ASWs. Quite the opposite.
The 10y gilt yield traded in a narrow range today, a dull stat that conceals a lot of roll-related action.