💤🗳📈Predictability might play its role in reducing UK risk-premia across the board, especially considering "les alternatifs". A few charts and articles to mull on for the weekend:
🏧 Gilts: John Authers column this morning flags 4 historical examples of how debt markets exert decisive influence over voters choices and governments. Recency bias might be on our side. Read here - https://lnkd.in/ek9j6gq4
💷 FX: Combo of EU conciliatory approach, pledges of fiscal prudence and #stability should increase GBP's appeal. Economic performance as surprised and an August cut not likely to be a game-changer though feasible (~68%). Read here - https://lnkd.in/e8fBeGpV - and make sure to follow Audrey Childe-Freeman for G10 FX.
💳 Credit: Sterling spreads slower recovery in 1H should improve in the 2H with BOE cuts, #stability and a gilt rally. Has higher carry and duration and premium to gilts still comparably decent. Quality has been averaged down by rising stars. Read here - https://lnkd.in/enE2_7zy - and follow Mahesh Bhimalingam for Credit Strategy.
✌ Volatility: this chart comparing 2003 vs 2014 ISDA definitions of sovereign CDS as a way to measure Frexit risk does take me back. More lenses to measure exit-risk here - https://lnkd.in/ecDYrYw7
Ending the week with France 10y spreads in the 65bps, down from over 80bps at wides.
We are hosting a Global Rates webinar on Wednesday 10th covering ECB, BoE, Fed and BoJ which should be useful. Register here - https://lnkd.in/eDGUx9iY
Follow Bloomberg Intelligence for more.
Have a good weekend,
Renato
#fixedincome #credit #fx #rates #gilts