Bear Eye Key Support In Futures, Curve Bear Flattens

U.S. labour market data helps keep the pressure on core global FI markets, with today’s weakness helping gilt bears push the contracts comfortably through pre-existing YtD lows and the 20-day EMA. Futures have printed as low as 100.76, shedding over 60 ticks on the day.

• Bears now target the Dec 13/gap high (100.20), which provides key support.
• Cash gilt yields are 5.5-8.5bp higher with the curve bear flattening.
• 2s now sit ~21bp off Dec lows in outright yield terms, while 10s are ~35bp off their Dec trough.
• 2s10s stick in the range seen since early December, while 5s30s pulls back off the early ’24 steeps (which represented the steepest levels seen since ’22).