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GILTS: Early Rally Fades, Cues From Overseas Eyed

GILTS
CEEMEABulletUKGlobalFixed Income BulletsRegionMarkets

 Gilts follow cues provided by EGBs during early Friday trade.

  • Softer-than-expected CPI data out of Spain & France drove a rally at the open, with futures peaking at 98.90 before fading back to ~98.60 at typing.
  • Key support at 98.11 remains untested during the latest corrective pullback, leaving the bullish technical picture in play. Initial support at yesterday’s low (98.31).
  • Initial resistance at the 20-day EMA (99.71).
  • Yields little changed to 1.5bp lower across the curve as the rally fades.
  • Light bull flattening seen.
  • 10-Year gilt/Bunds set to close at the widest level since Sep ’23, spread above 185bp, with dovish ECB repricing dominating this week.
  • BoE-dated OIS shows 38bp of cuts through year-end and 121.5bp of cuts through June ’25, fading some of yesterday’s late hawkish repricing.
  • SONIA futures -1.5 to +1.5.
  • Only lower tier UK data is due today, which will leave focus on cross-market moves & U.S. data.
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 Gilts follow cues provided by EGBs during early Friday trade.

  • Softer-than-expected CPI data out of Spain & France drove a rally at the open, with futures peaking at 98.90 before fading back to ~98.60 at typing.
  • Key support at 98.11 remains untested during the latest corrective pullback, leaving the bullish technical picture in play. Initial support at yesterday’s low (98.31).
  • Initial resistance at the 20-day EMA (99.71).
  • Yields little changed to 1.5bp lower across the curve as the rally fades.
  • Light bull flattening seen.
  • 10-Year gilt/Bunds set to close at the widest level since Sep ’23, spread above 185bp, with dovish ECB repricing dominating this week.
  • BoE-dated OIS shows 38bp of cuts through year-end and 121.5bp of cuts through June ’25, fading some of yesterday’s late hawkish repricing.
  • SONIA futures -1.5 to +1.5.
  • Only lower tier UK data is due today, which will leave focus on cross-market moves & U.S. data.