BRIEF: EC Approves Italy's 5th NGEU Payment Request For EUR11 billion

MNI BRIEF: ECB's Eye On French Markets, Price Stability Key

MNI BRIEF: Lower Inflation Path Remains Bumpy - Lagarde

MNI BRIEF: 'Noise' Driving Economic Deterioration- Campos Neto

MNI China Daily Summary: Tuesday, July 2

MNI BRIEF: China Aims For AI Standards By 2026

EZ/UK T-Bill Calendar: Greece, EU Auction on Wednesday

EZ/UK Bond Supply Calendar: 2.60% Aug-34 Bund Due Wednesday

Ita-coin Nowcast Negative For Second Month

RPT-MNI: Canada Sticks To Fiscal Anchors, Spends Chunk Of Windfall

MNI BRIEF: Poilievre Calls QE 'Scam' And Would Limit BOC Remit

© 1982-2024 MNI. All rights reserved.
Terms | Privacy
Log Out
Free Trial

Firmer Start, Friday’s High Holds In Futures

GILTS
Bank Of England (BOE) Market NewsHomepageBond Market NewsBulletMarketsFixed Income Bullets

Friday’s high (96.44) caps the early rally in gilt futures, as broader core global FI markets regain some poise after Friday’s late pullback.

  • A clear break of Friday’s high would turn focus to the May 23 high (97.44). A break there would start to threaten the bearish technical picture.
  • Yields are 0.5-2.0bp lower across the curve, with 5s outperforming.
  • Headline flow was scarce during Friday's pullback.
  • Pre-election political posturing continues to dominate UK news flow, with most BoE appearances cancelled through the July 4 election (policy meetings will take place as scheduled).
  • A reminder that late Friday saw the Citi/YouGov year ahead inflation expectations metric moderate to +3.1%, representing the lowest level since July 2021. Longer run inflation expectations also fell, hitting the joint lowest level seen since March ’21.
  • That will be providing some background support for GBP FI.
  • Friday also saw J.P.Morgan recommend 10-Year gilt longs at 4.38%, noting they “expect yields to be capped around 4.45% and floored around 4.10%.” They also flagged a relative cheapness vs. U.S. Tsys (based on cross-market STIR levels). This is a tactical trade, targeting a move to ~4.20%.
  • Final UK manufacturing PMI data is due today.
  • Elsewhere, the BoE will sell GBP750mn of medium-term maturity gilts from its APF.
208 words

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.

Friday’s high (96.44) caps the early rally in gilt futures, as broader core global FI markets regain some poise after Friday’s late pullback.

  • A clear break of Friday’s high would turn focus to the May 23 high (97.44). A break there would start to threaten the bearish technical picture.
  • Yields are 0.5-2.0bp lower across the curve, with 5s outperforming.
  • Headline flow was scarce during Friday's pullback.
  • Pre-election political posturing continues to dominate UK news flow, with most BoE appearances cancelled through the July 4 election (policy meetings will take place as scheduled).
  • A reminder that late Friday saw the Citi/YouGov year ahead inflation expectations metric moderate to +3.1%, representing the lowest level since July 2021. Longer run inflation expectations also fell, hitting the joint lowest level seen since March ’21.
  • That will be providing some background support for GBP FI.
  • Friday also saw J.P.Morgan recommend 10-Year gilt longs at 4.38%, noting they “expect yields to be capped around 4.45% and floored around 4.10%.” They also flagged a relative cheapness vs. U.S. Tsys (based on cross-market STIR levels). This is a tactical trade, targeting a move to ~4.20%.
  • Final UK manufacturing PMI data is due today.
  • Elsewhere, the BoE will sell GBP750mn of medium-term maturity gilts from its APF.