A Little Weaker, I/L Syndication Sees Record Orders

Gilts follow core global FI peers away from yesterday’s highs, although the moves are limited.

• Futures trade back below 98.00. Our technical analyst suggests the short-term outlook for the contract remains bearish, despite recent gains. Initial support - July 4 low (97.32).
• Yields 1-2 bp higher across the curve, light steepening.
• European & U.S. supply likely provides some spill over pressure, while Nov-54 I/L gilt supply sees a record order book for a linker.
• Wider macro matters set to dominate today, headlined by Fed Chair Powell.
• Further out, the hawkish wing of the BoE will appear tomorrow, with Pill and Mann scheduled. Pill’s comments could be particularly important for markets given his position as one of, if not the, most hawkish internal MPC member.