Futures Breach Initial Resistance, Front End Continues to Lead Rally

Gilt futures have briefly shown beyond 94.00 before backing off from best levels to last print +125 ticks on the session, as the post-U.S. CPI foray allows the contract to breach the previously outlined initial technical resistance point, easing bearish pressure and allowing bulls to shift focus higher to the 20-day EMA (94.60). BoE-dated terminal policy rate pricing has softened by a little over 20bp today, last showing just below 6.30% in policy rate terms, while SONIA futures run as much as 22.5bp firmer at typing as the reds outperform, operating a touch off dovish session extremes. The moves in UK STIRs have promoted further outperformance at the front end of the curve, with the 2s30 steepening by a touch over 10bp on the day, testing steepest levels of the month, as wider cash benchmarks sit 6.5-18.5bp richer.