Focus was on Rishi Sunak Economic plan

A fairly busy session for the UK, with all eyes on Rishi Sunak as he unveiled his multi-billion pound winter economy plan.

• 4 new schemes announced by Chancellor:
• Pay as you grow: Pay as you grow means loans can be extended from 6 to 10 years businesses who are struggling can make interest only payments and apply to suspend repayments for up to 6 months
• Gov't guarantee on covid-19 loans extended to 10 years, and deadline extended for all govt loan schemes to end year
• VAT bill can be repaid by businesses under 11 smaller payments rather than 1 big payment in March
• Hospitality and tourism VAT cut extended from Jan 13 to March 31 Gilts initially rallied, but saw some small unwind after lunch time from the high of the session.
• Some desk sees it as quite underwhelming, but it comes in the middle of expectations so there will always be some that are very disappointed and some pleasantly surprised..
• Price action showed that on the margin the market was somewhat disappointed with institutions better buyer of the longer end Gilts, pushing the curve bull flatter.
• Dec Gilt futures (G) up 22 ticks at 136.24 (L: 136.07 / H: 136.38)
• The 2-Yr yield is down 0.5bps at -0.054%, 5-Yr is down 0.5bps at -0.076%, 10-Yr is down 0.9bps at 0.209%, and 30-Yr is down 1.4bps at 0.759%.