Broader Bid & Labour Market Data Lend Support

Gilts follow core global FI markets higher, with the details of the latest UK labour market data providing an added domestic input to the rally (details point to a continued softening in the labour market data, despite some better-than-expected headline data outcomes. A quick reminder that ONS methodology tweaks muddy comparisons vs. previous prints for the headline data).

• That leaves gilt futures above 93.00, over one big figure higher vs. settlement.
• Initial firm resistance in the contract is at 93.23, the 20-day EMA. Conversely, the bear trigger is 90.85, yesterday’s low. The technical outlook in the contract remains bearish for now.
• Mixed vs. expectations (but still contractionary across the board) French PMI data is currently being digested by the market, helping cap the early rally in bonds.
• Cash gilts yields are 5-8b.5p lower across the curve, with 10s leading the rally.
• SONIA futures show 1-12bp richer through the blues, a little shy of early session highs in the main.
• BoE-dated OIS still run 1-5bp softer, in line with pre-gilt open levels, as the strip flattens.
• Flash PMI data headlines the domestic docket during the remainder of the session.
• GBP1.5bn of 0.75% Nov-33 I/L supply is also due.