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Bull Steepening Ahead Of PMIs & BoE

GILTS

Gilts are firmer on the day.

  • Softer-than-expected flash French PMI data provides support in recent trade.
  • That comes after early two-way trade impacted by last night’s FOMC decision and some focus on today’s EGB supply.
  • Gilt futures last +20 at 99.26 (range 99.01-99.29). Initial resistance at 99.35.
  • Cash gilt yields are 1.5-4.5bp lower, bull steepening.
  • SONIA futures roughly in line with pre-gilt open levels, unchanged to +5.5.
  • BoE-dated OIS shows ~73bp of ’24 cuts ahead of today’s decision.
  • Participants also eye the latest UK flash PMI data.
  • The latest round of public finance data provided a slightly worse than expected assessment of the UK fiscal situation.
  • Continued political headwinds for PM Sunak won't be a needle mover for markets.
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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