June 06, 2024 08:06 GMT
A Touch Softer To Start, DMP & ECB Eyed
GILTS
Gilts are marginally lower early today, looking to cues from global peers.
- Futures stick to a narrow 15-tick range, last -11 at 97.50.
- Tuesday’s low and high (97.08 & 97.86) present initial support and resistance.
- Cash gilt yields are ~1-2bp higher across the curve.
- Benchmark gilt yields failed to break below their respective Tuesday lows during yesterday’s U.S. data-inspired rally.
- Tuesday’s yields lows present the next target for bulls, protecting May lows.
- Local headline flow remains centred on political matters, with the Conservatives still trailing heavily in the polls and Monday’s Sunak-Starmer debate still being assessed/critiqued.
- The BoE’s latest DMP survey hits this morning (09:30).
- The key components worth watching in here are the inflation expectation components and wage expectations and employment growth component.
- The previous report saw some mixed readings - realised employment growth fell as did realised wage growth and expected wage growth. However, expected employment growth (despite falling on a 3-month reading) picked up on the single month measure, with a similar story for expected price growth.
- Further afield, the ECB’s latest monetary policy decision will provide the macro focal point today. Any guidance surrounding the future path of monetary policy is set to garner the most attention, assuming the widely telegraphed and expected 25bp rate cut is delivered.
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