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Futures Briefly Through 97.00 Post-CPI, Eyes On Haskel & Syndication

GILTS
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Gilt futures firm on the back of the softer than expected domestic CPI readings outlined earlier.

  • The contract trades through yesterday’s high, peaking at 97.12, before fading back to the 96.95 area, last +20 on the day.
  • Technically, gilt futures maintain a firmer tone and yesterday’s strong rally reinforces current bullish conditions. The break higher resulted in a breach of resistance at 96.71, the Sep 20 high. This paves the way for a climb towards 97.84, the Jul 19 high on the continuation chart. Clearance of that resistance level would further strengthen bullish conditions. On the downside, key short-term support has been defined at 94.58, the Nov 13 low.
  • Cash gilt yields are little changed to 4bp lower, with the curve bull steepening.
  • 2s10s and 5s30 tick away from yesterday’s multi-week lows in the process.
  • BoE pricing and the SONIA futures strip haven’t moved much vs. level outlined in our pre-gilt open STIR bullet.
  • Comments from BoE hawk Haskel are due at 18:00 today. He will speak on the topic of “investing a better Britain.”
  • We also remain on the lookout for the launch of the syndication of the new 4.75% 20-year Oct-43 conventional gilt. Market sources suggested that would likely come today and we estimate issuance size of GBP5-7bn.
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Gilt futures firm on the back of the softer than expected domestic CPI readings outlined earlier.

  • The contract trades through yesterday’s high, peaking at 97.12, before fading back to the 96.95 area, last +20 on the day.
  • Technically, gilt futures maintain a firmer tone and yesterday’s strong rally reinforces current bullish conditions. The break higher resulted in a breach of resistance at 96.71, the Sep 20 high. This paves the way for a climb towards 97.84, the Jul 19 high on the continuation chart. Clearance of that resistance level would further strengthen bullish conditions. On the downside, key short-term support has been defined at 94.58, the Nov 13 low.
  • Cash gilt yields are little changed to 4bp lower, with the curve bull steepening.
  • 2s10s and 5s30 tick away from yesterday’s multi-week lows in the process.
  • BoE pricing and the SONIA futures strip haven’t moved much vs. level outlined in our pre-gilt open STIR bullet.
  • Comments from BoE hawk Haskel are due at 18:00 today. He will speak on the topic of “investing a better Britain.”
  • We also remain on the lookout for the launch of the syndication of the new 4.75% 20-year Oct-43 conventional gilt. Market sources suggested that would likely come today and we estimate issuance size of GBP5-7bn.