Sharply Lower UK Inflation print spurs a rally in Bonds while DXY Consolidates recent gains

 UK inflation surprised on the downside with mom print at -0.20% (prior 0%) and yoy print at 3.90% (prior 4.40%). 

PBoC Kept the LPR unchanged at 3.45%

German PPI -7.9% yoy , prior -11.00%

UK Retail Price Index 5.30% yoy , prior 6.10%

US Existing Home Sales 3.82mn, Prior 3.79mn

USTs rallied as the soft inflation print from the UK catalyzed a rally in bonds. UK Gilts closed sharply lower at 3.526% from prior day high of 3.698%. US 20Y bond auction was weak. High yield of 4.213% tailed the when-issued yield by 1.5 basis points. Dollar demand was soft, evidenced by a 2.55 bid-to-cover ratio that trailed the prior 12-auction average of 2.65.* Philadelphia Fed President Harker (2023 FOMC voter) stated rates should move lower, but not right away, according to Bloomberg.

DXY consolidated recent gains with GBP leading losses on the inflation print.

A quick look below on the current implied pricing for Central Bank Policy Rate

For the day, you have the Initial Jobless Claims data, Final Prints of the US Q3 GDP and 5Y TIPS Auction. 

*Briefing.com