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Futures Sub-96.00, BoE Pricing Off Yesterday’s Dovish Extremes Ahead Of Decision

GILTS

Bears push gilt futures sub-96.00 at the second attempt, although late Tuesday levels are still some distance away, owing to yesterday’s post-CPI rally.

  • Cash gilts run 4-7bp cheaper, with the belly to intermediates leading the weakness.
  • Some light hawkish BoE pricing adjustments post-FOMC, with payers coming in after yesterday’s dominant receiver-side flows, will have aided the move in gilts.
  • A little over 14bp of tightening is now showing for today’s BoE decision, as markets lean more towards a hike than no move in rates, while terminal policy rate pricing shows above 5.50%, meaning one hike is a little more than fully priced once again. A quick reminder that yesterday’s softer than expected CPI data has seemingly made the decision much tougher to call.
  • SONIA futures last 1-7bp cheaper a little off session lows.
  • Fresh selling in Tsys would have done the cheapening move in gilts no harm.
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
HomepageBond Market NewsBank Of England (BOE) Market NewsBulletMarketsFixed Income Bullets
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
HomepageBond Market NewsBank Of England (BOE) Market NewsBulletMarketsFixed Income Bullets

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