Futures Test 100.00 On BoE Cut, Before Pulling Back Alongside STIRs

Gilt futures tested psychological resistance at 100.00 in knee-jerk reaction to the 25bp “hawkish” BoE rate cut, easing back to ~99.65 last, trading below pre-decision levels as SONIA futures also pull back from fresh session highs,

• Caution on the speed/size of any future BoE cuts and the lack of firm commitment to further easing limit the dovish market reaction.
• Cash gilt yields are 1.5-5.0bp lower on the day, in line with to above pre-decision levels after registering fresh session lows across the curve.
• March 22 lows in 10-Year yields held, while 2s hit the lowest level seen since May ’23.