June 19, 2024 07:16 GMT
Firmer Services CPI Outweighs Bund Rally
GILTS
Competing forces noted at the gilt open, with the firmer-than-expected UK services CPI reading outweighing the spill over from a rally in Bunds.
- That leaves gilt futures -11 at 98.60, after the contract initially pierced yesterday’s high at the open.
- Friday’s high remains intact, while bulls are still in technical control.
- Meanwhile, initial firm support is 97.57, 20-day EMA.
- Cash gilt yields are 2.5-3.5bp higher across the curve, light bear flattening seen.
- SONIA futures stick within early ranges, with the strip twist flattening.
- This morning’s data presents a hawkish outcome for services CPI vs. BoE forecasts, which will factor into MPC discussions in the run up to tomorrow’s monetary policy decision.
- Our full preview of that event can be found here.
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