After the rampant optimism of the past five to six weeks, some common sense has returned to markets as rate expectations start to rise again, with economic data remaining stubbornly strong and core inflation proving stickier than hoped. No sharp sell-off, but a necessary pause for thought.

Lead managers have recognised they need to take advantage of favourable conditions before the storm clouds start to build again and are quick to offload any remaining exposures: witness Morrisons banks offloading yet more slugs of paper, just one day after the MFN lock-ups expired! At what price? A clue, its yet another price crunch!