Futures Recover From Friday’s Late Low

Gilt futures recover from Friday’s late lows before fading from best levels to trade +12 at 97.77 (97.70-93 range).

• Initial resistance is seen at Friday’s high (98.29), while initial support comes in at the 20-day EMA (97.19)
• Cash gilt yields are 1.5bp lower across the curve.
• SONIA futures and BoE dated OIS are mostly little changed on the day.
• China data released over the weekend and sizeable backflow payments in EGBs seem to support wider core global FI markets in early London trade.
• The latest reduction in the size of BoJ bond purchases had help cap any rallies in Asia hours.
• Lower tier wage survey data and weekend news flow covering political posturing from PM Sunak won’t be impacting GBP rates markets.
• The BoE will conduct GBP800mn of short maturity APF gilt sales this afternoon.
• Tomorrow's labour market report provides the first UK release of note this week, although recent BoE-speak has pointed towards a greater focus on services inflation than wage metrics.