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I R Rise As Gilts Drop Following Strong Inflation Data

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Monday March 13, 04:11 PM

Strong UK data depress gilt prices
Gilt prices fell on Monday as hopes of a near-term interest rate cut in the UK diminished following two sets of strong data.
Producer prices data showed that input prices were flat last month but manufacturers still managed to raise their output prices, leaving the annual inflation rate at 2.9 per cent.
Paul Dales, UK economist at Capital Economics, said that the data suggested that price pressures at the
start of the inflation pipeline remained reasonably strong

10-year gilt was yielding 4.372 per cent, up 2bp.

Whether Gordon likes it or not, the pressure on IR will build forcing the B o E into line. It is TTRTRates again.


LONDON (AFX) - European government bonds remained weak, still pressured by the prospect of higher interest rates in both the euro zone and the US, as well as the beginning of monetary tightening in Japan.
Bonds have continued to trend lower in the wake of Friday's stronger-than-expected US jobs data which raised talk that US interest rates could go beyond 5.00 pct.
"The bond market is still digesting the strength in the non-farm payrolls numbers and the more hawkish commentary from central bankers," said CIBC analyst Audrey Childe-Freeman.
This afternoon, European Central Bank president Jean-Claude Trichet said tighter monetary policy in the euro zone, the US and Japan would not pose any threat to global growth.
Over in the UK meanwhile, gilts were also lower, tracking their European counterparts, and after firmer-than-expected
UK producer prices and house price data gave further reason for the Bank of England
to cut interest rates
Edited by Realistbear

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RB with all due respect...

Must you turn every little story into a new thread? You're fragmenting this forum into hundreds of related (discontinued) threads with single-digit responses and hence, no continuity, in case you hadn't noticed.

Must you remain the centre of attention at the expense of any real in-depth analysis or discussion on these boards? Why do you even insist on duplicating other peoples' threads into the bargain?

I know you're only doing your job, but you're terminating a lot of decent threads before their time, which is to the detriment of this site IMHO...

Wasn't sure which ones are being duplicated--can you give an example--it would help. Thanks, RB

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Apparently (I hear from a genuinely reliable source...) pay inflation in the civil service works out at 6.5%!

Not the sort of figure Gordon Brown would want made public, but when you factor in people's jobs being upgraded etc, 6.5% is the figure you get!

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Here's a nice piece in he Guardian...

Rising gilt yields could signal global turning point

Excellent article. Of particular noteworthiness:

It may be too early to say definitively that Mr Greenspan's "conundrum" has been solved, but the move upwards in world bond yields is significant and could mark a step change upwards in the world cost of capital

More confirmation that the economic cycle is turning and the days of cheap credit and lax lending standards are coming to an end. Exhuberant HPI in the UK is 100% dependent on both. Patience is a virtue.

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?

      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%

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