Bears Remain In Control, Key Support Levels Still Eyed

Momentum remains with Gilt bears this morning, as underperformance vs. Bunds is evident. The major cash Gilt benchmarks trade 1-2bp cheaper across the curve, while Gilt futures have retested their early London base on a shallow look back below 100.00. The Mid-April cheaps in Gilt futures (99.73) present key technical support for the space, while the YtD high in 10-Year Gilt yields is 2-3bp away from prevailing levels. These key technical parameters and the impending U.S. CPI print present the major focal points ahead of tomorrow’s BoE meeting (’33 Gilt supply is due at the top of the hour), where a 25bp rate hike is essentially fully priced. Wider BoE-dated OIS is little changed to 3bp firmer today, while the SONIA strip is flat to 5bp cheaper through the reds.