Long-end gilt yields come off the boil

If there is a reason for the more optimistic tone so far in European morning trade, this is arguably a key one.

30-year gilt yields are down 31 bps to 4.58% on the day, backing lower after having clipped 5.10% briefly yesterday. This could be a case of somebody knowing something ahead of time as we are seeing quite a sudden push lower in yields (h/t @ Ryan Paisey). *coughs in BOE*

But it could also be a bit of markets behaving on edge before the US CPI data later.

Our friend PiQ here has more on that in his tweet:

👀 Don't look now, but Gilts and GBP behaving like someone knows something is going to happen...

~ They've always been markets that you can see a 'nod' in.

— PiQ  (@PriapusIQ) October 13, 2022

It's a tough one to figure out as it is a tense period in the market. But if the BOE does walk back on their word now, it'll look foolish. Then again, can they really afford to let the market slip? There's still two days to sort out the mess and the waiting ahead of the US CPI data today isn't helping.

In any case, broader markets are finding some relief with the dollar being pulled lower and equities Equities Equities can be defined as stocks or shares in a company that investors can buy or sell. For example, when you buy a stock, you are purchasing equity, thereby becoming a partial owner of shares in a specific company or fund.Equities do not pay a fixed interest rate, and as such are not considered guaranteed income. Consequently, equity markets are often associated with risk.When a company issues bonds, it’s taking loans from buyers. When a company offers shares, on the other hand, it’s selling p Equities can be defined as stocks or shares in a company that investors can buy or sell. For example, when you buy a stock, you are purchasing equity, thereby becoming a partial owner of shares in a specific company or fund.Equities do not pay a fixed interest rate, and as such are not considered guaranteed income. Consequently, equity markets are often associated with risk.When a company issues bonds, it’s taking loans from buyers. When a company offers shares, on the other hand, it’s selling p Read this Term seeing a light bounce.

Update: As I write this, 30-year gilt yields are falling further to 4.53%. Hmm.