Futures Return To Middle Of Yesterday’s Range

The bid in wider core global FI markets since yesterday’s close allows gilt futures to recover to around the middle of yesterday’s range after going out a little above lows on Wednesday.

• The contract last prints +15 just above 96.40, ~20 ticks off of early session highs.
• Technically, futures maintain a firmer tone and Tuesday’s strong rally reinforces current bullish conditions. The break higher resulted in a move through 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 this hurdle would further strengthen bullish conditions. On the downside, key short-term support has been defined at 94.58, the Nov 13 low.
• Cash gilts ease by 3-4bp, with a very modest flattening bias observed.
• SONIA futures are flat to 1.5bp firmer through the blues, fading from best levels, while BoE-dated OIS also moves off dovish session extremes to last show flat to 1.5bp softer on the day.