Fixed Income: Gilt Opens Lower In Line With Bunds
Gilt futures opened lower, in line with Bunds, while stock markets recorded gains. Today’s focus is on the August 6-7 BoE Minutes, which are widely expected to show another split 1-7-1 vote, with Besley arguing for a hike while ultra-dove Blanchflower should continue to favour a rate cut. We expect the minutes to underpin an outlook for steady rates ahead, with fears of dislodging inflation expectation deterring the MPC from cutting rates. The September 10-year Gilt future is down 15 ticks to 108.94. The 2-year Gilt yiled is up 3 bp to 4.58% and the 10-year yield is up 2 bp to 4.61%. FTSE 100 opened 0.6% higher, while DAX was up 0.5% and CAC 40 rose 0.6%