May 22, 2024 08:56 GMT
CPI Drives 5s Cheaper On 2-/5-/10-Year Fly Ahead Of Auction
GILTS
5s cheapen by ~2.5bp on the 2-/5-/10-Year gilt butterfly (with flattening in 5s10s driving), as the hawkish feedthrough from UK CPI dominates thus far.
- This provides potential headwinds to demand at the impending GBP4bn 4.125% Jul-29 gilt auction, despite the RV cheapening. 5s sit in the middle of the multi-month range on that fly.
Fig 1. UK 2-/5-/10-Year Butterfly (bp)
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