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Front End Of Curve Outperforms In Wake Of Labour Market Data


Weakness in core global FI markets provided a gap lower for futures at the open, although the partial labour market report (which revealed the latest signs of a cooling labour market, albeit with wages remaining at an elevated level from a historical perspective) more than reversed losses

  • The contract last shows +20, ~40 ticks off lows.
  • There isn’t much in the way of technical support until 93.04, the Oct 10 low. Conversely, key short-term resistance is located some way above prevailing levels, residing at 95.66, the Oct 12 high.
  • Labour market data also promotes some bull steepening on the cash curve, with the major benchmarks running 1.0-4.5bp richer.
  • SONIA futures now run 1-5.5bp richer through the blues, with the reds outperforming.
  • BoE-dated OIS last show 2-6.5bp softer through the liquid contracts with the strip flattening post-labour market data.
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