Swaps - GBP
RPI and supply news hit the inflation curve today. Nominals bull-flattened.
Gilt supply dominated today, with traders citing good demand for '28 and '51 gilts, ahead of a supply drought. Insurers eye a world after Solvency II.
On a day when the BOE heralded the success so far of the SONIA rollout, his point was reinforced by SONIA supply, which also carried a bearish whiff.
Gilt outperformance appears to reflect the shock news that the UK is not America. Or is it? Elsewhere, traders eye the rally and the 2071 supply.
Gilts ended with a solid underperformance as 10y yields rose 2.5ps after a session lacking rhyme or reason. And strategists look for a UK bounce.
Traders report that the 2071 is doing badly and contend that 5y spreads remain rich.
The unloved 2071 arrived with the ultralong end underperforming shorter on the curve, and against linkers. Cable basis fell again. Gilt ASW richened.
The next RPI print may be over a week away - and Brent a touch lower today - but the front of the inflation curve continues to gain.
USTs' slightly delayed reaction to the NFP data eventually pulled gilts up. UK inflation is underperforming. A new issuer gets a rating.
Recent pension scheme de-risking by BA and TUI were suspected of being behind sharp long ASW flows this morning.