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Bear Flattening Post-FOMC

GILTS

Post-FOMC bear flattening on the Gilt curve, with the major cash benchmarks running flat to 5bp cheaper, while futures are 10 ticks cheaper on the day after gapping lower then recovering from session lows after bears failed to challenge the recent base.

  • Chancellor Hunt has reaffirmed the idea that the BoE has "no alternative" but to hike interest rates to ward off inflation.
  • Late yesterday we learnt that the Bank plans to hold an externally-led review re: its economic forecasting.
  • SONIA futures are 1-5bp cheaper through the reds, with the back end of the reds leading the move.
  • BoE-dated OIS once again indicates a terminal policy rate of ~5.85% based on FOMC read-through.
  • BoE’s Cunliffe speaks today, although that will be on the topic of “central banks and the future of payments,” which will leave focus on the ECB decision and continued post-FOMC adjustments.
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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