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Reversing Yesterday's Bull Flattening

GILT SUMMARY

Following yesterday's bull flattening move, the gilt rally lost momentum today with the curve now bear steepening.

  • Gilt cash yields are 2-4bp higher on the day. The 2s30s spread is 1bp wider. Last yields: 2-year -0.0595%, 5-year -0.0598%, 10-year 0.2245%, 30-year 0.7908%.
  • The Dec-20 gilt future trades at 136.04, towards the bottom end of the day's range (L: 135.89 / H: 136.69)
  • The BoE announced an additional GBP150bn of QE purchases to shore up the recovery as the economy contends with the second national lockdown. The QE announcement exceeded the GBP100bn consensus estimate.
  • Alongside the BoE stimulus, Chancellor of the Exchequer Rishi Sunak announced an extension of the furlough scheme until March.
  • There will be no further UK data releases until next week.

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