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Generally Sticking To Early Range, Off Cheaps


The lack of meaningful macro headline flow has allowed Gilts to generally oscillate within the range established at the open, save one brief and limited foray cheaper, which allowed futures to extend marginally through early session lows, before recovering.

  • Intraday session lows in the contract now provide the most immediate point of technical support (more meaningful support points were outlined in an earlier bullet), with the contract last ~65 ticks cheaper on the day, ~15 off lows.
  • Cash Gilts see 4-7bp of cheapening, with bear flattening remaining in play.
  • SONIA futures are off cheaps, with reds leading the weakness, -12bp at some points in that zone.
  • BoE-dated OIS has nudged higher, with terminal policy rate pricing now at 5.48%.
  • The lack of meaningful event risk scheduled for the remainder of this week (after this morning’s final services PMI reading was little changed vs. flash) leaves participants on headline watch/assessing broader macro impulses.
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