September 27, 2024 09:34 GMT
GILTS: Early Rally Fades, Cues From Overseas Eyed
GILTS
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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