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Big day for gilts


Today's rally in gilts and repricing of BOE expectations has stalled a little, with gilt futures reaching an intraday high of 125.38 (close to the 125.40 resistance level our technical analyst flagged which represents the 1.382 projection of the Feb 16 - 18 - 23 price swing).

  • Outside of the PMI this morning, there have been no real UK-specific drivers of the moves.
  • The SONIA strip is up 2-13 ticks for Whites, 16-20 ticks for Reds and over 20 ticks for Greens/Blues today with 2-year gilt yields down 17.6bp.
  • The 2s5s curve has flattened 3.0bp, 5s10s flat and the 10s30s curve steepened 5.0bp at the time of writing.
  • This leaves the first 15-years of so of the gilt curve well below the levels seen going into the February MPC meeting before climing to a peak to around 1.53% (similar to levels seen post the Feb meeting) and then in the 30+ year sector of the curve yields are higher.

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