A Little Firmer Again, Futures Top 97.00

Fresh demand for core global FI markets during early NY trade takes gilt futures above 97.00. Macro headline flow remains light, leaving focus on early NY positioning tweaks.

• Bulls need to retake yesterday’s high (97.43) to negate some of the recent bearish pressure.
• Cash gilt yields are 3.5-4.5bp lower across the curve leaving the multi-month ranges in benchmark yields comfortably intact.
• No meaningful UK news seen since this morning’s well-received gilt auction.
• UK-centric discussions have generally focused on the size of the seemingly likely Labour majority and margin of error in the opinion polls, as participants look for a change in power in Westminster later this week.
• Relative cross-market vol. in gilts and GBP FX pairs remained contained.
• This points to a lack of worry surrounding a change in political power in the UK, at least at this stage.
• This comes after a volatile few years for UK policymaking, headlined by the COVID pandemic and Truss mini Budget, as well the initial adjustments to Brexit.