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GILTS: Early Rally Reverses

GILTS
CEEMEABulletUKGlobalFixed Income BulletsRegionMarkets

The early gilt rally has faded with wider core global FI markets pulling back from session highs.

  • Futures now flat at 96.12 vs. early highs of 96.52, after failing to close yesterday’s opening gap lower.
  • Bearish trend intact, bulls have to overcome the October 7 high (96.93) to start turning the technical tide. Initial support at yesterday’s low (95.83).
  • Yields 1-2bp higher, curve a touch steeper.
  • Light outperformance vs. Bunds after yesterday’s fresh cycle closing wides above 195bp.
  • No impact from in line with expected GDP data.
  • BoE-dated OIS prices 22bp of cuts for November, 35bp through year-end and 95bp through June. Little changed to 3bp more hawkish.
  • SONIA futures flat to 1.0 higher on the day, fading alongside gilts.
  • Fiscal speculation should continue to dominate ahead of the October 30 Budget, with markets particularly sensitive to headwinds for gilt demand (as seen following yesterday’s caveated warning from Citi).
  • Further afield, U.S. PPI data headlines the macro calendar today.
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The early gilt rally has faded with wider core global FI markets pulling back from session highs.

  • Futures now flat at 96.12 vs. early highs of 96.52, after failing to close yesterday’s opening gap lower.
  • Bearish trend intact, bulls have to overcome the October 7 high (96.93) to start turning the technical tide. Initial support at yesterday’s low (95.83).
  • Yields 1-2bp higher, curve a touch steeper.
  • Light outperformance vs. Bunds after yesterday’s fresh cycle closing wides above 195bp.
  • No impact from in line with expected GDP data.
  • BoE-dated OIS prices 22bp of cuts for November, 35bp through year-end and 95bp through June. Little changed to 3bp more hawkish.
  • SONIA futures flat to 1.0 higher on the day, fading alongside gilts.
  • Fiscal speculation should continue to dominate ahead of the October 30 Budget, with markets particularly sensitive to headwinds for gilt demand (as seen following yesterday’s caveated warning from Citi).
  • Further afield, U.S. PPI data headlines the macro calendar today.