Futures Pierce Resistance Before Fading, Little Changed Ahead Of NFPs

Gilts have firmed a little in early Friday trade, with the rally in wider core global FI markets allowing initial resistance (96.57) to be pierced.

• Still, the contract operates in a relatively contained range (96.43-66) after pulling back from best levels, last +16 at 96.51, with the immediate focus falling on the U.S. NFP release.
• The bearish technical backdrop remains in play for gilt futures, but bulls are forcing the contract closer to initial meaningful resistance at the 20-day EMA (96.85). A break there would start to turn the technical tide a little more in their favour.
• Gilt yields are little changed to 1bp lower across the curve, after 2s and 5s faded from fresh ’24 highs set in the run up to the FOMC. A reminder that 10+-Year gilts found support ahead of their own multi-year yield highs in the lead up to Wednesday’s FOMC.
• SONIA futures are flat to 2bp higher on the day, with ~45bp of cuts showing through year end, little changed vs. pre-gilt open levels.
• Slightly firmer-than-flash final UK PMI data did little for gilts.
• Local headline flow continues to be dominated by the latest round of woes for the ruling Conservative Party.