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GILTS: Back To Flat, Cross-Market Cues And Local Data Driving Things

GILTS
CEEMEABulletUKMarketsFixed Income Bullets

ross-market cues dominate this morning, with a bid in equities and peripheral EGBs initially leading gilts higher, before a pullback from highs.

  • Futures -3 at 92.20, range 92.12-52.
  • Futures breached yesterday’s high, peaking at 92.52, but failed to challenge Fibonacci resistance at 92.75.
  • The overarching technical setup remains bearish, but the recent recovery poses a risk to that trend.
  • Bears need to force a move through the Jan 16 low (90.68) to assert fresh pressure.
  • Yields essentially flat across the curve.
  • 10-Year spread to Bunds ~1bp wider around 208.5bp after the first sub-210bp close since November.
  • Higher-than-expected PSNB may have factored into the spread widening this morning.
  • BoE-dated OIS shows 67bp of cuts through year-end, ~4bp more dovish on the day.
  • The Brightmine wage survey (released overnight) may be having some impact in STIRs.
  • Median basic pay awards in the 3 months to December dropped to 3.3%, the second consecutive softening in pay awards.
  • The press release that accompanied the data noted that "the combination of rising NICs and ongoing economic pressures is likely to result in a decrease in 2025 pay awards compared to the median increase of 4.5% recorded in 2024."
  • Chancellor Reeves will speak to CEOs later today, early Wednesday comments from her offered no new information.
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ross-market cues dominate this morning, with a bid in equities and peripheral EGBs initially leading gilts higher, before a pullback from highs.

  • Futures -3 at 92.20, range 92.12-52.
  • Futures breached yesterday’s high, peaking at 92.52, but failed to challenge Fibonacci resistance at 92.75.
  • The overarching technical setup remains bearish, but the recent recovery poses a risk to that trend.
  • Bears need to force a move through the Jan 16 low (90.68) to assert fresh pressure.
  • Yields essentially flat across the curve.
  • 10-Year spread to Bunds ~1bp wider around 208.5bp after the first sub-210bp close since November.
  • Higher-than-expected PSNB may have factored into the spread widening this morning.
  • BoE-dated OIS shows 67bp of cuts through year-end, ~4bp more dovish on the day.
  • The Brightmine wage survey (released overnight) may be having some impact in STIRs.
  • Median basic pay awards in the 3 months to December dropped to 3.3%, the second consecutive softening in pay awards.
  • The press release that accompanied the data noted that "the combination of rising NICs and ongoing economic pressures is likely to result in a decrease in 2025 pay awards compared to the median increase of 4.5% recorded in 2024."
  • Chancellor Reeves will speak to CEOs later today, early Wednesday comments from her offered no new information.