Firmer On CPI

Core global FI rallies further on the gilt open as participants digest UK CPI, futures last +43 at 99.16 (98.97-99.22 range).

• The Mar 14 high (99.35) presents initial resistance.
• More meaningful resistance seen at the Mar 12 high (100.37).
• Gilt yields 5-6bp lower, 10s settle around 4.00%.
• SONIA futures & BoE-dated OIS around pre-gilt open levels.
• Overnight the XpertHR wage growth measure printed at the lowest level seen since late ’22, along with flagging expectations for a moderation in pay growth in ‘24 vs. ’23 (see earlier bullet for more details there).
• Elsewhere, some comments from Chancellor Hunt have increased speculation re: October General election timing.
• Hunt also pointed to a pre-election fiscal event, which was already widely expected.
• Wider fiscal comments from Hunt and shadow Chancellor Reeves lacked much in the way of meaningful detail, given the above expectations.
• Domestic focus now moves to tomorrow’s BoE decision. See our full preview of that event here.