Good thing there were no stops on short sterling today

gooseman said:
0% depo's guys....
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Uh-huh, this is a very confusing statement from the BoE, but it doesn't mean 0% depo!!!!

In the good old days you had a reserve target and if you had excess or deficit you would use the standing facility to borrow or lend money at a penalty rate. Now, you don’t have a reserve target, so you can give any money you like to the BoE at 0.5%. So no need for the the standing facility at 0% as you cannot be in excess or deficit.
 
Martinghoul said:
Aye-aye, Cap'n. Let's believe in high inflation together, but while we do that, let's agree that we don't believe in an independent Central Bank anymore. Which means to me that if the economy doesn't recover, rates are not going anywhere, inflation or no inflation. If you wanna bet on inflation, buy linkers, they're a lot cheaper today.
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I dunno who I think are less independent, the BOE or the ONS... ;)

Now if I were setting RPI...
 
arabianights said:
I dunno who I think are less independent, the BOE or the ONS... ;)

Now if I were setting RPI...
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Very good point, Cap'n, you're so right, it hurts... I just have this irrational attachment to linkers that I need to purge. So, all said and done, I think I am just gonna sneak out and buy some gold. See ya laters...
 
Liquid gold! I like! Although I don't consider myself a moron, I think I will take that in the spirit of advice.
 
Just talked to someone who went to the GEMM meeting with the BoE yesterday.

It's pretty bananas, honestly... Basically, they said that they don't really care about any side effects of the APF, 'cause it's so desperately bad out there. It's bullet bid, no matter what the cost. Merv says 'Mine! Your size'. It's sorta scary.
 
Next question: how to identify BOE buying without direct access to order flow? I assume it isn't going to be smoothly drip fed during the day!

Suggestions?
 
What do you mean, identify? They tell you exactly what they're gonna buy. They said that they realize that the dealers will be front-running and the potential for repo squeezes, but they do not care (they will be lending some on repo, if there's demand)...

5y to 25y conventionals, not the bonds that will be auctioned during the week, minimum outstanding needs to be £4yds. For next Wed it's 5 14s, 4T 15s, 8 15s, 4 16s, 8T 17s and 5 18s. In general, announcements are at 4PM on Thursday for next week's purchases.
 
arabianights said:
Next question: how to identify BOE buying without direct access to order flow? I assume it isn't going to be smoothly drip fed during the day!

Suggestions?
Click to expand...

Depends on how you want to play it. Do you want to trade the zig-zags or ride the potential rally longer term ?
If they are piling in £75bn over 3 months it seems too good to be true if you already own gilts.
And once they have piled in and pushed the price up, there must be a break-even point at which the remaining future interest is no longer worth having and it's time to go back into cash for the want of something better. i.e. whilst the BOE may stay in to the end, others will be looking to get out sooner.
3-month window ?
Other downside risks ?

Glenn
 
Glenn said:
Depends on how you want to play it. Do you want to trade the zig-zags or ride the potential rally longer term ?
If they are piling in £75bn over 3 months it seems too good to be true if you already own gilts.
And once they have piled in and pushed the price up, there must be a break-even point at which the remaining future interest is no longer worth having and it's time to go back into cash for the want of something better. i.e. whilst the BOE may stay in to the end, others will be looking to get out sooner.
3-month window ?
Other downside risks ?

Glenn
Click to expand...
Problem is that a) it's more like £150bn already promised; b) they were very emphatic in saying that £150bn is a lower bound; it can be as much more than what they have already promised as they want; c) they said 3m is an upper bound, so they could buy everything in a month or next week, if they're so inclined.

The point is that £75bn is about 1/3 of all conventional gilts outstanding and it's a much larger proportion of the free float, given the types of domestic investors in the particular sectors they're targeting. I am only hearing bullish noises from pretty much everyone here, with suggestions of 10y gilts going to 2% yield.
 
aye it's the zig zags I'm going for, if you knew when they were going in then ceteris paribus that's going to cause a rally in gilt futures at that moment so long as not everyone knows (I don't have any real facilities to trade cash).

2% yield could be interesting, still a long way to go :)
 
wasp said:
I love this thread, I ain't got a clue what you are all on about...!
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Dude, do you reside in Ye Olde Great Britain? If so, yesterday the Old Lady either saved you and UK Plc or put a final nail in your respective coffins. You take your pick...
 
I meant more in the colours for months etc... terminology that means SFA!
 
brucemole said:
I think we'll see some pick up in inflation. Wouldn't be outright short the greens - long reds against them. Paying -2 and -3 Z10/H11/M11 at the moment, I think that can go positive.

But yeah greens done well today, what's your take on the curve goose?
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hope u weren't in that long red sort green mate
 
gooseman said:
hope u weren't in that long red sort green mate
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Thankfully not goose.........yeah more flatttening today.

Just long the ZHM and jobbing around the whites and reds at the moment.

What's your thoughts on SS? You think it's going to flatten more?
 
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