A Little Softer, No Meaningful Clues From BoE’s Broadbent

Bulls failed to solidify the early rebound back above 98.00 in futures, with the contract fading to fresh session lows of 97.74 in the time since.

• Initial support at 97.23 is still some way off.
• Cash gilt yields are ~1.5bp higher across the curve.
• Gilts widen vs. all major European peers across the curve.
• Some desks have noted that they are looking for entry points in gilt/bund wideners after the recent outperformance for UK paper.
• SONIA futures are flat to -4.0, with BoE-dated OIS pricing 50/50 odds of a June cut and ~54bp of easing through year end.
• Outgoing BoE Deputy Governor Broadbent spent little time discussing the upcoming policy decision - simply noting that it's “possible” that Bank Rate can be cut in the summer (and gives little hint as to his view regarding June - only that the MPC decisions are data dependent).
• Broadbent will cast his final MPC vote in June, before departing at the end of the same month.
• The DMO will hold its quarterly consultation with investors/GEMM today and the BoE will conduct GBP750mn of medium term APF gilt sales.