Front End Leads Post-Fed Rally, BoE Vote Split & Language Now Eyed

Gilt futures push notably higher as participants react to last night’s Fed decision.

• The contract last prints +145 or so, a little above 101.50, with a high of 101.63 registered.
• Cash gilt yields are 11-22bp lower on the day.
• Generic 2s have lost a little over 40 bp since Monday’s close, with local data and Fed feedthrough the dominant forces there. Bulls now eye the 23 May close (4.135%), which is less than 10bp away.
• 10s look to their May base (3.624%), which is ~5bp below today’s early low.
• SONIA futures see fresh support around the gilt open after a pullback from best levels, last running +0.5-24.0.
• BoE-dated OIS prices just under 125bp of cuts through ’24, a little off early dovish extremes.
• The BoE decision headlines the docket today. We have flagged our preview and key points of interest elsewhere.