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Bull Flattening


The gilt curve has bull flattened on the day alongside weak trading in equities.

  • Cash yields are up to 3bp lower, with the long-end outperforming. The 2s30s spread is 3bp narrower. Last yields: 2-year -0.0321%, 5-year 0.011%, 10-year 0.3284%, 30-year 0.9162%.
  • The Dec-20 gilt future trades at 134.88, towards the top end of the day's range (L: 134.55 / H: 135.03).
  • Short sterling futures are broadly 0.5-1.5 ticks higher through whites/reds/greens/blues.
  • BoE Governor Andrew Bailey earlier indicated that he favours a loosening of financial regulations as a means to boosting productive investment as the economy recovers from the Covid crisis.
  • The DMO earlier sold GBP3.25bn of the 0.125% Jan-24 Gilt and GBP2.00bn 0.625% Oct-50 Gilt.
  • Tomorrow sees the release of October CPI data, with public finance data and retail sales data out on Friday.

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