GILTS: Early Rally Holds

Gilts rally alongside core global FI markets 

• Dovish press articles and comments from ex-central bankers covering next week’s Fed decision have increased market-implied odds of a 50bp cut at that meeting, supporting bonds.
• Futures stick within yesterday’s range, last +21 at 101.16.
• Technicals in the contract remain bullish. Initial resistance at yesterday’s high (101.51), with support at the Sep 10 high (100.64).
• Yields ~2bp lower across the curve.
• SONIA futures flat to +4.0, just off session highs.
• BoE-dated OIS shows ~48.5bp of cuts through year-end and ~135bp of cuts through mid-’24.
• Outcomes within the BoE/Ipsos inflation attitudes were mixed (0.1ppt lower 1 year out, 0.1ppt higher for longer-run), with little feedthrough into markets, as to be expected.
• Wider cross-market moves and broader headline flow will dictate ahead of the weekend, with the UK calendar essentially empty.