UK Sovereign

UK chancellor of the exchequer Philip Hammond abandoned on Monday his predecessor’s ambition to pay off the country's public debt by 2020 but renewed its commitment to fiscal consolidation. SSA bankers responded by predicting higher government borrowing.

The London Stock Exchange this week moved to deflect a mounting list of European Commission concerns about its proposed merger with Deutsche Börse by saying it would consider selling off its LCH SA French clearing business.

The aftermath of the UK’s decision to leave the European Union has been an uneasy calm. Inflation is at a 20 month high of 0.6%, unemployment is at a post-crisis low, and consumer spending is robust. But then of course, nothing has happened yet.

Moody's will review the UK's credit rating on Friday. While the Brexit vote prompted Moody’s to change its outlook for the UK’s Aa1 credit rating to negative, Moody’s representatives have said the UK could regain credit stability if it commits to keeping its debt to GDP ratio in check.

The last round of IMF lending to developed market countries (before the European sovereign crisis) was 40 years ago this autumn — when Britain was locked out of the capital markets and had to go ‘cap in hand’ to the Fund.

The UK Debt Management Office (DMO) announced on Wednesday that it will hold two long end syndications in the fourth quarter of 2016, in response to calls from Gilt-edged market makers and investors.

Gilt-edged market makers and investors are calling for the UK Debt Management Office to sell a long dated conventional syndication in October and follow it with an index-linked deal in November.

Gilt-edged market makers and investors are calling for the UK Debt Management Office to sell a long dated conventional syndication in October and follow it with an index–linked deal in November.

The Bank of England’s Gilt buying programme ran into difficulties on Tuesday, securing only £1.12bn — £50m short of its target — despite offering to pay well over market value.

Since the August 4 announcement that the Bank of England will purchase corporate bonds again, much chin stroking has occurred about the differences between the Bank’s approach and that of the European Central Bank. In at least one respect, though, the BoE's scheme seems superior.

A bigger than expected push towards monetary easing by the Bank of England on Thursday sent Gilt yields to new record lows, but unfavourable basis swap rates and a rampant dollar market means an uptick in arbitrage funding in sterling by public sector borrowers is unlikely, said bankers.

GlobalCapital is pleased to announce the preliminary shortlist of nominees for its Global Derivatives Awards 2016. Nominations are based upon market feedback and research conducted in recent months. Winners will be unveiled at a gala dinner in London in September.