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MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
GILTS
Gilts are the outperformers this morning following this morning's inflation data.
- Headline was in line with expectations while core CPI was just one tenth lower than the economists' consensus but really the market was hoping for more with pricing by November looking for 161bp as of yesterday's close. That has now reduced to around 148bp at the time of writing (still almost fully pricing three 50bp hikes).
- It is not just the near-term pricing that has changed but the terminal rate. The Mar-23 SONIA futures contract has moved 17 ticks higher to see a low of 96.635 for the strip now (from 96.465 at yesterday's close). This implies a terminal rate of closer to 3.375% rather than above 3.50%).
- Gilts have therefore seen a substantial move across the curve, although there is of course some steepening that has accompanied the move.
- 2y yields down -12.9bp today at 2.169%, 5y yields down -12.7bp at 2.204%, 10y yields down -11.8bp at 2.534% and 30y yields down -9.3bp at 2.775%.
- 2s10s up 1.1bp today at 36.5bp and 10s30s up 2.5bp at 24.1bp.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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