UK DEBT/STIRS: taking 3.1% CPI largely in stride

A tame, almost non-reaction to the inflation overshoot and modest above forecast headline print, but Gilts remain tethered to the lows having just registered a marginal new Liffe base at 124.72 (-26 ticks on the day, so far). Short Sterling still 1 tick above parity, bar Dec17, and perhaps the feeling is that CPI y/y has now peaked, a month after the BoE predicted and 0.1% point lower. However, there is a more general downtick in bonds, despite a somewhat mixed German ZEW survey, while stocks inch higher and the commodity complex is on fire, UK gas futures now shooting up after Brent yesterday and also on supply factors. Bunds have now been down to 163.35 (-29 ticks) and US Treasuries are a few ticks adrift, with a slight steepening bias as the long end ‘welcomes’ 30 year supply after a soggy 10 year auction yesterday.

12 Dec 2017 - 10:05- - Source: ransquawk

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