Free Trial

Futures Through Key Support On CPI Data

GILTS

The hawkish repricing following the UK CPI data sees gilt bears initially push futures comfortably below 97.00, basing at 96.83, before retaking 97.00.

  • Key support at the May 14 low (97.23) has given way, with any fresh extension lower set to expose the May 3 low (96.43). The latter protects the April 25 low and bear trigger (95.36).
  • Cash gilt yields are 7-14bp higher, with 5s leading the sell off.
  • Bears will start to eye the April yield highs if fresh weakness is seen.
  • 2s10s and 5s30s hit fresh multi-week flats.
  • SONIA futures are 0.25 to 15.0bp lower, off initial session lows.
  • Late Tuesday saw BoE Governor Bailey suggest that reserves are likely to settle at GBP345-490bn, while he expects a significant uptick in repo operation usage.
  • The April Brightmine survey revealed an uptick in in the 3-month Y/Y wage deal reading vs. March (+4.9% from +4.6%)
  • Comments from BoE’s Breeden are due later today, although she will appear on a panel focused on macroprudential matters, which will likely limit the scope for broader monetary policy discussions.
  • GBP4bn of 4.125% of Jul-29 gilt supply is also due today.
188 words

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.

The hawkish repricing following the UK CPI data sees gilt bears initially push futures comfortably below 97.00, basing at 96.83, before retaking 97.00.

  • Key support at the May 14 low (97.23) has given way, with any fresh extension lower set to expose the May 3 low (96.43). The latter protects the April 25 low and bear trigger (95.36).
  • Cash gilt yields are 7-14bp higher, with 5s leading the sell off.
  • Bears will start to eye the April yield highs if fresh weakness is seen.
  • 2s10s and 5s30s hit fresh multi-week flats.
  • SONIA futures are 0.25 to 15.0bp lower, off initial session lows.
  • Late Tuesday saw BoE Governor Bailey suggest that reserves are likely to settle at GBP345-490bn, while he expects a significant uptick in repo operation usage.
  • The April Brightmine survey revealed an uptick in in the 3-month Y/Y wage deal reading vs. March (+4.9% from +4.6%)
  • Comments from BoE’s Breeden are due later today, although she will appear on a panel focused on macroprudential matters, which will likely limit the scope for broader monetary policy discussions.
  • GBP4bn of 4.125% of Jul-29 gilt supply is also due today.