Futures Through Yesterday’s High, Curve Flatter

Gilt futures move through yesterday’s high at the open, looking to U.S. Tsys through Asia/early London hours.

• That leaves the contract +60.
• Technically, a bearish theme in the contract remains intact, with consolidation noted at present. Scope is seen for a move towards the major support at 90.38, the Oct 12, 2022 low on the continuation chart. On the upside, initial firm resistance is at 93.05, the Aug 16 high.
• Cash benchmarks are 2-4bp richer as the curve bull flattens.
• SONIA futures are flat to +6bp through the blues, as the strip flattens.
• As noted elsewhere, XpertHR survey data indicated the level of pay rises in the UK cooled for the first time this year in the quarter to July.
• A survey collated by Sage flagged that UK small business sales have fallen by 20% over the last year.
• On the issuance side, The DMO has announced that the long syndication in the first half of September will be the 4.00% Oct-63 gilt (ISIN: GB00BMF9LF76). As MNI expected the syndication will take place in the week commencing 4 September. We pencil in a GBP5-7bln transaction size.
• Flash UK and Eurozone PMI data dominates the pre-NY docket.