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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Meanwhile:
The participants in this surprisingly old-school quote-dunk interaction are the BBC’s economics editor Faisal Islam, and Bloomberg’s UK political editor Alex Wickham.
And, as should be incredibly obvious (not least because the context is UK markets), extremely little is at stake here.
And or course, you hate to see it. One of the UK’s most high-profile broadcast journalists arguing with a regional trade publication reporter over the significance of a 10bps move in cable? Who would take pleasure from such a ruckus???
The Financial Times launched Alphaville in 2006 as a “daily news and commentary service giving financial market professionals the information they need, when they need it.”
OK fine, fine — who is right?
We’d guess anyone who has made it even this far has a passing grasp of the premise. If not, here’s MainFT to fill you in:
Sir Keir Starmer’s allies are plotting to stop Greater Manchester mayor Andy Burnham from standing in the seat of retiring independent MP Andrew Gwynne as part of an attempt to stage a Westminster comeback and potential leadership bid…
Gwynne, who was suspended by Labour almost a year ago following leaked WhatsApp messages in which he insulted a constituent, announced on Thursday that he was standing down as an MP for medical reasons.
His decision will mean a by-election will be held in the Greater Manchester seat, which Gwynne won in 2024 with a 13,000-vote majority.
None of it really screams “market story”, but post-2022 UK political coverage works a little bit like this:
Burnham, the apparently assumed Starmer challenger, has a bit of a history with the gilt market already. He told the New Statesman in September:
We’ve got to get beyond this thing of being in hock to the bond markets.
Two days later, he told the FT:
People have deliberately misinterpreted my comments about the bond markets
And earlier this week, he used a speech at the Institute for Fiscal Studies to both whinge about bond markets…
[Our] shallow, adversarial political system has shown itself incapable of lifting us out of it and it only adds to the volatility, so we do find ourselves stuck in a rut and in hock to the bond markets.
…and take the knee:
Matching England’s devolved authorities with a national political system that thinks and works in the same way rather than at cross purposes, as it is right now, would get the whole country pulling in the same direction. It would create the circumstances in which we could progressively re-take public control of those essential enablers of the economy, and simultaneously allow a stronger grip on the public finances, providing reassures to the bond markets.
It’s the type of approach that allowed the New Statesman to run this headline…
Andy Burnham: Britain is still “in hock to the bond markets”
…and Reuters to run this one…
Starmer rival Burnham says UK bond investors safe under his economic vision
…about the same event.
In his tweet today, Bloomberg’s Wickham focused on the Gwynne announcement’s apparent impact on cable (the amount of dollars a pound buys) and gilts (UK government bonds):
Now, obviously any market response like this is something Bloomberg should be expected to cover. Likewise, MainFT — both places put some market reaction fairly far down in their write-ups, reflecting the small scale of the moves and their relative unimportance. Reuters led a piece on it, but that’s kind of their thing.
So is Islam right that this is “not even a move”?
Probably not. Bloomberg flashed Gwynne’s resignation at 10:38am (EST), following a Guardian scoop (seemingly not, as we initially reported, following a Gwynee Facebook post). Journalists were tweeting about it by around 10:44 am, and gilts and the pound started properly moving just after 11am.
Roughly a 30-minute delay — not exactly Flash Boys, but we can’t see another clear trigger and the move did seem to be contained to UK assets. Maybe the market wasn’t sure how to trade things immediately, maybe London’s a bit sleepy, maybe traders are still getting up to speed on market-relevant news being released on social media, maybe it ain’t that deep, but it’s definitely a move.
Was it, by any stretch of the imagination, a “significant move” in absolute terms and therefore worth reading into?
No. We therefore award both sides no points, and once again regret ever going on X. May the gilt market have mercy on all our souls.