Bad day out in the gilt market. Gilt asw collapsing alongside a very sharp steepening and real yields up dramatically. Market participants were ok with the abandonment of the welfare plan but drew a line under replacing the chancellor. Straight up a term premia move and an unforced error.

Front end spreads continuing to be bid with news that Fed may cut the rrp rate. Other drivers have been the easy realised funding conditions and the big B unit

Poor old Sonia taken to the woodshed again. The market will look to Bailey on Thursday for respite but we’ve now a shade under 3 cuts priced for basically the rest of the cycle. Which I suppose is plausible as long as the labour market doesn’t fall out of bed……