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A Touch Firmer & Steeper To Start

GILTS

Gilt futures follow the global post-FOMC impulse and see a gap higher at the open, showing through yesterday’s best levels, although a meaningful extension is not forthcoming, with the contract back from best levels, last +15 or so.

  • Cash Gilts run 0.5-3bp richer, with some light bull steepening in play on the curve.
  • Technically, Gilt futures are consolidating. A bullish theme remains intact and the contract is trading closer to its recent highs. A resumption of the uptrend would signal scope for gains towards 99.71, the 50.0% retracement of the Mar-Jul downleg. Initial firm support to watch lies at 96.11, the Jul 21 low.
  • SONIA futures sit a touch below best levels of the session, running 1-4.55bp richer through the greens, with the reds outperforming.
  • Monthly survey data from the CBI provides some lower tier local interest today, with the combination of post-FOMC readthrough and the latest ECB monetary policy decision set to provide more prominent impulses.
  • Local news flow has been dominated by the previously outlined BBG sources piece noting that “advisers to Chancellor of the Exchequer Jeremy Hunt are increasingly concerned that the Bank of England risks raising interest rates too much in the coming months, potentially pushing the UK into an unnecessary recession.”
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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