Cross-Market Moves At The Fore After Bulls Fail To Breach Resistance In Futures

The move away from session bests stabilises, leaving gilt futures mid-range, +15 or so.

• Cash benchmarks are 0.5-1.5bp richer.
• Bulls ran out of steam just ahead of 95.79 in futures, the Sep 1 high and key resistance level, with cross-market moves coming to the fore thereafter.
• SONIA futures last show flat to 3.5bp richer, with the late greens and early blues leading.
• Minimal twist flattening has been seen on the BoE-dated OIS strip, with pricing covering this month’s meeting showing 20bp of tightening, while terminal policy rate pricing ticks back below 5.65%.
• Gloom surrounding the housing market dominated local news flow overnight, with the RICS house price balance metric moving to the lowest level seen since ’09.
• Participants remain focus on the potential for cross-market spill overs surrounding the impending ECB decision, with domestic headline flow light since the gilt open.