A Little Softer Alongside Peers

Gilt futures soften alongside the moves in wider core global FI markets since yesterday’s close, but the pullback remains relatively shallow, leaving the contract -10 at 97.90 (97.75-97.92 range).

• Resistance is now seen at yesterday’s high (98.23). A break there would further undermine the bearish technical theme.
• Yields are ~2bp higher across the curve, in a parallel shift.
• STIR markets are in line with the pre-gilt open levels flagged earlier.
• Discussions continue to centre on tomorrow’s BoE decision.
• The 3 focus areas will be the vote split, the economic projections and the guidance. Our full preview of the event and thoughts on those factors can be found here.
• The Times shadow MPC has suggested that “the BoE should leave interest rates unchanged at its meeting on Thursday but consider loosening policy at its next gathering in June if inflation and wages continue to ease.”
• The S&P/KPMG/REC report on jobs and RICS house price data will cross just after midnight, but there isn’t anything in the way of meaningful UK data releases scheduled before the close.
• The long end will have to absorb GBP2.5bn of 1.50% Jul-53 green gilt supply today.