Futures Struggle To Move Meaningfully Beyond 97.00.

Forays above 97.00 in futures remain limited, with highs of 97.06 seen so far today.

• The contract last trades at 96.89.
• The next meaningful resistance level is located at the June 4 high (97.86) after Monday’s opening gap lower was closed
• Some will look to pre-NFP levels as an intermediate resistance point.
• The recent recovery from key support at the May 29 low (95.33) is still deemed corrective at this stage.
• Cash gilt yields are ~1-2bp lower across the curve, with a light flattening bias.
• This helps 2s10s away from yesterday’s tear-to-date highs.
• The incrementally firmer-than-expected UK monthly GDP reading had little tangible impact.
• We noted that there will be little policy impact from the data, with next week's CPI print much more important for the BoE.
• Today’s GBP900mn 0.625% Mar-45 I/L gilt auction saw the highest cover ratio for a linker auction since at least ’17.
• This comes on the heels of yesterday’s record demand at the 10-year gilt syndication.
• SONIA futures are a little shy of best levels, last flat to +2.5.
• BoE-dated OIS is little changed on the day, showing ~34bp of ’24 rate cuts.
• PM Sunak & Labour leader Starmer will participate in their latest debate from 19:00 London.
• Broader macro focus is set to fall on the U.S. CPI release and FOMC decision.