GILTS: Budget largely in line with expectations; consultation agenda due out shortly
Mar-15 15:14
- The Budget today threw up few surprises as expected. We had already received the headline measures on the energy price guarantee and the other big measures had been well telegraphed in the press: extra money on defence, fuel duty freeze for 12 months, replacement for the superdeducatable (to encourage investment) and an extension of the 30 free hours of childcare to children aged 9 months and above (rather than just for 3+ year olds at present).
- The gilt remit of GBP241.1bln was close enough to expectations to cause no real market moves (the median expectation was GBP230.8bln from the 11 previews that we read) and the maturity split was also fairly close to expectations.
- Overall, the gilt market has been much more focused on other events but with 2-year gilts underperforming Schatz and 2-year USTs. 2-year gilt yields are up 18bp at writing versus increases of 40+bp for Schatz/2-year USTs.
- This has led to the UK curve seeing more of a parallel shift versus the bull steepening seen elsewhere.
- Note that the DMO is due to release the consultation agenda for Monday's investor/GEMM meetings at 15:30GMT, which should give us more of an insight into April to June issuance.
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BONDS: MNI Europe Pi (Positioning Indicator): Central Bank Shakeup
Feb-13 15:12
The ECB and BoE meetings at the start of February shook up bond futures positioning, particularly for Gilts and BTPs.
- Gilt Open Interest jumped 7.8% on Feb 2 (the highest in a single day in the past year, outside the quarterly rolling period), while a pullback in OI met a surge in contract price for BTPs, suggesting short cover.
- Full PDF analysis emailed to subscribers and available here.
MNI EXCLUSIVE: Economist de Ridder On BoE's View Of UK Productivity
Feb-13 15:06
MNI interviews economist Maarten de Ridder about BOE views of productivity -On MNI Policy MainWire now, for more details please contact sales@marketnews.com
CROSS ASSET: Estoxx future breaks Friday's high
Feb-13 15:05
- The tick higher in Risk, provides some selling into the USD.
- Estoxx (VGH3) has broken Friday's high, with next resistance seen at 4265.00 initially.
- The Kiwi is still the best performer in G10 against the Dollar, now at new intraday high.
- Resistance in NZDUSD comes at 0.6389, last Thursday's high.
