Curve Bear Flattens, Futures Move Lower After Technical Resistance Holds

Gilt futures run 25 ticks cheaper on the day, after the early data-aided rally (which was driven by soft monthly production metrics) unwound.

• Technical resistance in gilt futures capped the rally, before a move away from best levels in wider core global FI and an uptick in crude oil prices helped apply pressure.
• Cash gilts are 2-5bp cheaper, bear flattening.
• BoE dove Dhingra provided familiar tones in a BBC interview overnight.
• More recently, comments from BoE chief economist Pill stressed that inflation remains too high, although he noted the debate re: the need for further tightening is “finely balanced,” with a lot of already enacted policy tightening still to work through the system.
• The BoE’s credit survey pointed to familiar areas of worry re: the domestic housing market.
• SONIA futures sit unchanged to 3bp cheaper through the blues, with the early bid more than unwound alongside the move in gilts.
• BoE-dated OIS is essentially unchanged across the curve.