Firmer To Start, 20-Day EMA Caps Rally In Futures

Gilt futures move through yesterday’s highs on the combination of the bid in wider core global FI markets and the previously covered domestic economic data (headlined by softer-than-expected Q4 GDP).

• The contract has a brief and limited look above 98.50, before pulling back to the 98.45 area, last showing +64 on the day.
• Technically, the 20-day EMA (98.54) has capped the early rally. Bulls need to force a break of that marker to start turning the technical tide more in their favour.
• SONIA futures remained underpinned alongside the bid in gilts, last showing flat to +8.5 through the blues.
• BoE-dated OIS shows ~80bp of cuts through ’24 (see out pre-gilt open STIR bullet for some more colour on that front).
• On the headline front UK political matters remain front and centre, with by-elections in Wellingborough and Kingswood set to dominate local headline flow today.
• Elsewhere, FT sources have suggested that Chancellor Hunt “is considering slashing billions of pounds from public spending plans to fund pre-election tax cuts if he is penned in by tight finances in his March 6 Budget.”
• BoE speak from Mann & Greene will cross this afternoon.