Futures Have A Look Below 98.00

Spill over surrounding the latest round of Fedspeak and perhaps some caution ahead of this afternoon’s medium bucket APF sales from the BoE provide some fresh pressure for gilts.

• Futures break through the Jan 16 low (98.16) and show through round number support at 98.00, printing as low as 97.97 in recent trade.
• Key support in the form of the Jan 25 low (97.57) provides the next meaningful target for bears.
• Cash gilt yields are 7.5-9.0bp higher across the curve.
• 10-Year yields move through 4.00% (session highs of 4.015%), with the early ’24 high in that measure (4.065%) providing the next point of interest in the benchmark.
• Domestically, slightly firmer-than-expected final services & composite PMIs, as well as the previously outlined labour market update from the ONS, which pointed to a tighter-than-envisaged labour market (albeit with caveats and a low response rate under previous methodology previously identified), also factored in.