A Little Firmer Despite GDP Print

Gilts look through the UK GDP data and follow global peers higher early today.

• We did suggest that the data shouldn’t be a gamechanger for the BoE.
• That leaves futures +17 at 98.02 (97.93-98.15 range).
• Initial resistance comes in at the Apr 12 high (98.23). A break there would deepen the threat to the overarching bearish setup, with the recovery from the April lows already relatively pronounced.
• Cash gilt yields are 0.5-2.0bp lower across the curve, with light bull flattening seen.
• SONIA futures recover alongside the bid in gilts, to last trade little changed to +2.0 through the blues.
• BoE-dated OIS doesn’t deviate too much from pre-gilt open levels, with a little under 60bp of ’24 cuts still priced.
• BoE chief economist Pill will speak again today (12:15 London), with comments from dovish MPC dissenter Dhingra also due (12:45 London).