Bonds - GBP
The new government’s salad days continue to yield unexpected fruit. In the gilt market it was linkers turn to for volatility. Is LDI over?
The BOE says that it feared a £50bn long gilt fire sale last week and has set out more about the aims of its emergency QE programme.
The BOE's commendable attempt to cap the gilt market sell-off is unsettling basis swappers and flattening XCCY curves.
The BOE accepted no offers again for a diminished pile of gilts today, with the curve selling off. Is the Bank adding vol now rather than subtracting?
If people hadn’t got the message yesterday, then they have today: the BOE is not going to buy gilts just because GEMMs offer them up for sale.
The biggest move of the last few days in cross-currency bases has been in front-ends, but the real action has been in 10y and longer.
Another day of hectic volatility in gilts saw the front end rally hard, before the BOE's minimalist buyback curbed it.
A glorious week for new PM Truss ends in grey skies while rain provides the only liquidity to be found in London. Traders are glum. BofA eyes LDI.
While mysterious PM Truss emerged today to take flack for her gambling nature, traders saw some very faint signs of normalisation.
Unlike recent gilt moves, a New Year turn collapse today in cross currency first breaks is not unprecedented. But only 2008 surpassed it.