Not nitroglycerine but, umm, something altogether more stable, ya know.
Gilts have overcome criticism at the start of 2010 to become one of the best-performing assets this year. Even Pimco, the bond fund whose manager Bill Gross made that famous “gilt market is resting on a bed of nitroglycerine” analogy, has reversed its stance on British bonds.
The UK’s Debt Management Office (DMO) has been quick to take advantage of demand, issuing about 46 per cent of this fiscal year’s £165bn gilt sales remit after less than a third of the period has passed.
The below from RBC shows gilt sales so far verses the ‘evenflow’ rate required to hit that £165bn target. About £76bn has now been funded, compared to an evenflow need of £51bn at this stage of the year. Even under the pre-emergency Budget gilt sale remit of £185bn, the DMO is ahead of schedule.
Or, as RBC’s Sam Hill glibly puts it, the Debt Management Office could leave today and go on holiday until September 20 without putting even a dent in its gilt-issuance schedule.
Related links:
UK government bond market strongest in Europe - FT
UK DMO: Gilts demand surge unlikely until liquidity rules final - Dow Jones
BoE to coordinate QE unwind with DMO, says King – Reuters