UK short-term rates are getting absolutely demolished right now. This is what happens when the market reprices BOE terminal rate expectations in real-time — SONIA curve getting bent out of shape, front-end vols exploding, and liquidity evaporating in the worst possible moment.
If you're long duration here, you're catching knives. If you're short, you're fighting the tape on every headline. Classic two-way violence.
Watch the 2Y Gilt — that's your canary. When front-end rates move this fast, something always breaks. Either positioning unwinds hard or we get intervention. No middle ground in a STIR blowout.
If you're long duration here, you're catching knives. If you're short, you're fighting the tape on every headline. Classic two-way violence.
Watch the 2Y Gilt — that's your canary. When front-end rates move this fast, something always breaks. Either positioning unwinds hard or we get intervention. No middle ground in a STIR blowout.